Friday, October 31, 2014

Michael Useem on Leadership from Mount Everest

While working for a previous management consulting firm, I sought to bolster my grasp of leadership, business and economics and decided to keep a running journal of notes and insights.  So I continue what I began the week before last, that is, capture some of those journal entries here.

Michael Useem

November 9th 2001
  1. Leaders should be led by the group’s needs. “First, leadership is built by serving. Second, when leaders truly serve and subordinate their private welfare to that of all others, their authority often becomes unquestionable.”
  2. Inaction can sometimes be the most difficult - but wisest - action. “Tempering the desire for action in business is likewise difficult…” especially if it appears like the right action, when it fact it is more of a precipitous, reckless one. I am most reminded of wu-wei, the essential principle of Taoism: Allow for the natural flow of things without interference. “Action through non-action.”
  3. If your words don’t stick, you haven’t spoken. Take responsibility for making sure that the intended impact of a key message has actually been achieved.
  4. Leading upwards can feel wrong if it’s right. Have the courage and conviction to do something different from what the leader says, especially if you know that what he or she is saying is wrong.
Reference: The Leadership Lessons of Mount Everest, by Michael Useem (2001), in Harvard Business Review (Vol. 79, no. 9, pp. 51-58).  Also, see Leadership Lessons from... Mr. Everest for more notes on Useem's four principles of leadership.

Wednesday, October 29, 2014

People Leadership of ex-Mattel CEO Robert Eckert

While working for a previous management consulting firm, I sought to bolster my grasp of leadership, business and economics and decided to keep a running journal of notes and insights.  So I continue what I began the week before last, that is, capture some of those journal entries here.

Robert Eckert

November 9th 2001

Robert Eckert assumed the top job at Mattel in May 2000, after the failed reign of Jill Barad. He was clear about his mandate:

  • Build brands
  • Cut costs
  • Develop people
He impresses me as a leader whom I can emulate, one whose style fits my own:
He acknowledges his responsibility to stand in front of investors, but at the same time recognizes himself as one of the employees.  He seems comfortable being in the spot light as well as eating in the cafeteria with employees.

He fosters candid conversation by acknowledging underlying issues and putting them on the table - a process he calls “setting the table.” I identified this as one of my key visions for the Training Dept. at ISPP/Chicago. The article as a whole made me reminisce a bit of my tenure as the head of that Dept. 

He defers to others’ expertise, which appears to have gained others’ favor rather well. However, I wonder to what extent he himself will assert more of his expertise as he gets more and more familiar with the company, its culture and people.  

Reference: Where Leadership Starts, by Robert Eckert (2001), in Harvard Business Review (Vol. 79, no. 10, pp. 53-61). 

Eckert retired from Mattel in 2011, after 11 years of such people leadership: Former Mattel Chief Robert Eckert Joins Friedman Fleischer & Lowe.

Monday, October 27, 2014

James Kouzes and Barry Posner on Leadership

While working for a previous management consulting firm, I sought to bolster my grasp of leadership, business and economics and decided to keep a running journal of notes and insights.  So I continue what I began the week before last, that is, capture some of those journal entries here.

(image credit)

I read a chapter from Warren Bennis et al. (2001) - Bringing Leadership Lessons from the Past to the Future, by James Kouzes and Barry Posner - and noted:
  1. Leadership is everyone’s business. “It’s possible for everyone to lead.”
  2. Leadership is a relationship. “It’s not the Web of technology that matters the most, it’s the web of people.”
  3. Leadership starts with action. “Waiting for permission to begin is not characteristic of leaders. Acting with a sense of urgency is.”
  4. Leadership development is self-development. “If we’re to ‘level-up’ and move beyond stage one, we need to enter the dark inner territory so that we can emerge from it into the light where we find our own true voice.” 

Friday, October 17, 2014

Admiring Meg Whitman (Now) as HP CEO

Before arriving at eBay in 1998, Meg Whitman actively moved her career along:
  • Brand Manager at Procter & Gamble
  • Management Consultant, then Senior Vice President at Bain & Co.
  • Vice President of Strategic Planning at The Walt Disney Co.
  • President at Stride Rite Corp.
  • President and CEO at FTD
  • General Manager of Playskool Division at Hasbro
Whitman chose to lead the enterprise side of the HP split, because she had mainly worked on the consumer side in these previous posts.  Even though she and interviewer Pattie Sellers gloss over this point, I think it's a pivotal choice for her.  To do something she hadn't done much before, at the highest level and for a multibillion dollar company speaks volumes about what jazzes her and where her confidence lies.

Much as Sellers amplified the corporate reversal from HP works better together in 2011, when Whitman became CEO, to now as HP splits into two giant companies, there really is no reversal.  Politicians may be marked by going back on their word, but this is no political campaign or office.  HP was bleeding ($12.5 billion of debt) three years ago, and now has healed ($4.7 billion of cash).  So the split is simply part of the turnaround and evolution of HP.

Sellers: How do you respond to that [i.e. competitive jab from Dell]?

Whitman: I'm shocked, shocked!  [Audience breaks into laughter.]  The competitor would say something?  Shocked!

To wit:
In May 2013, Bloomberg named Whitman "Most Underachieving CEO" among big-company CEOs whose stocks have turned in the worst numbers relative to the broader market since the beginning of each CEO's tenure. HP's stock led the list by underperforming by 30 percentage points since Whitman took the job.
Reference: Meg Whitman.


You go, Meg Whitman!

Wednesday, October 15, 2014

Admiring Meg Whitman (Then) as eBay CEO

Meg Whitman as eBay CEO (1998-2007)

I kept a journal on leadership, business and economics, and on September 1st 2003 I wrote the following notes, after reading Meg And The Machine: Unstoppable eBay is No. 8 among FORTUNE's Fastest-Growing Companies:

eBay’s phenomenal success is not necessarily the top takeaway for me. Rather, it is its missteps and subsequently its deft recovery from these.

For example, Whitman pulled eBay out of Japan - even though it is the second largest economy and a country of heavy internet users - because she figured (a) Yahoo! already had an insurmountable lead and (b) eBay would be hit offline. To wit, in 1999, she acquired Butterfield & Butterfield, a traditional auction house in San Francisco: She apparently couldn’t pull the acquisition off, and quietly sold it in 2002 for “immaterial gain.”

Apparently her costliest mistake, however, was rolling out a checkout procedure, Billpoint, that was geared to make it fast and easy for buyers and sellers to settle bills. One-third of the sellers hated it because they felt eBay was subverting their choice: They had grown fond of PayPal. To eBay’s credit, it acted quickly and re-established payment choices for the community.  In 2002 eBay bought PayPal for $1.5 billion, hundreds of millions more than it would have paid a year earlier. So, she missed the boat twice, but recovered effectively.

By the way, Elon Musk co-founded PayPal, and as the largest shareholder he came away with $165 million from that sale. 

A few key points in the Fortune article:

The international language of eBay managers: statistics. 

If it moves, measure it… In other words, eBay is a fire hose of business data.
Our destiny is completely in our hands… There are lots of dials we can turn.
Whitman is a soft-spoken, very humble leader, whose personality apparently pervades the culture: COO Maynard Webb says, “A monkey could drive this train.”
This company truly is built by the community of users.
She talks about building a global enterprise.
Understanding management-consultant culture is key to understanding Whitman’s style.
Late June, Whitman strides to center stage at a crowd of 10,000 customers in Orlando, FL, smiling, giggling nervously, then quieting the masses: 
We don’t always get it right the first time, but we try our best to get it right. We succeed when you succeed.
She has perfected a common touch.

She considers herself a “Level 5 manager” à la Jim Collins: exceedingly humble, focused on people first, takes the blame for problems but credits the team for successes.

A few days later, on September 12th 2003, I noted the following:

I resonate with Meg Whitman’s understated nature. Her nervous giggle is something similar to what I have gotten feedback on at the office. While I saw the value of managing my own nervous laughter, I know that it is a reflection of my humanity and personability.

Monday, October 13, 2014

GM CEO Mary Barra on Crisis and Change

The CEO with the toughest job in corporate America talks about leading through crisis and overhauling a culture.
Mary Barra has an unenviable top role among multinationals, to be sure, not just among American companies.  But it must have taken such a leadership climb for her to see how much of a mess General Motors was harboring.  She emphasizes candor and transparency among her people, though she doesn't speak all that candidly in this interview and demures instead on the underbelly of the recall crisis and her personal experiences.  That's not a bad thing necessarily, as she is keen to be constructive in her commentary and to move forward in the right way.  A friend in the audience knew that her testifying before Congress was painful, but her mindset was of solving problems so as not to have to go back there again. 

That said, Barra strikes me as a no-nonsense CEO, who is not apt to call attention to herself or even absorb company efforts into what she wants.  (She has never asked for a pay raise, for example.)  She cares deeply about GM and her work, and strives to communicate and collaborate with people on a behavior-by-behavior basis.  On this note, it is about doing the right.  In particular, it is zeroing in on the underlying causes, so that mistakes, flaws and problems do not happen again.  Do the right thing seems to be her mantra, just as the National Football League called upon this very phrase to deal with the domestic violence crisis in the league.

I emphasized this very thing with colleagues I worked with previously:  Solve problems, but if those problems recur, it may mean that an underlying process needs to be fixed.  Specifically, for example, our unit kept delaying accounts payable to contractors we had engaged, including one that was a year and a half late.  It was crucial to examine the end-to-end process.  We saw problems on our end, but the root cause laid in our interface with the finance department.  So we met with our colleagues there, and committed to regular meetings going forward to examine how our (corrected) process was going and what problems, if any, were emerging.  This, I imagine, is something of the sort that Barra engineered at GM.  Let's not forget the crisis, she emphasizes, certainly not if forgetting means out-of-sight, out-of-mind, and nothing-done.  

Barra eschews the word culture.  Why?  Because it often means something that people cannot change, or if so, it will take 10 years to make that change.  Neither was an option for her.  Her focus instead is as simple and practical, yet full of unheralded wisdom, I say:  Focusing on opportunities that any given situation offers for her and her people to change things.  For instance, she models her value that feedback is a gift by asking for feedback.  She promotes debate is good by calling on people by name, asking them what they think, and reassuring them it is fine to disagree.  GM must be like the Titanic: Its sheer heft makes it physically impossible to make a sharp 90° turn.  But with good foresight and planning and with the right values and process, there is every opportunity to work the wheel and turn the monolithic ship (i.e., in another incarnation) and avoid that devastating iceberg altogether.

Finally, it was a good question about what Barra will do to promote more women in the industry, presumably from her own company.  Just because she is a woman, it doesn't mean that she will truly or fully be committed to gender equality.  (It sounds like she is, though.)  But at the same time, I think, because she is a woman, she has to work at establishing herself in a male-dominated role and industry.  That must be a tough job in and of itself.  It doesn't mean that she cannot attend to both, but I imagine that the latter may have to be a priority for her at first, especially in light of the GM crisis, and then over time put more attention to the former. 

Friday, October 3, 2014

Economist Infographics on Economics and Business

Americans spend less cash, but keep more of it around.
Can you break a hundred? How the use of cash has changed in America. Since the 1990s, the American economy has grown healthily. But the use of cash for everyday spending stayed roughly the same. Cash as a store of value or for expensive transactions grew mostly in line with GDP. The bump was extra cash in case of Year 2000 hiccups -- but it left the system when banks functioned normally. Over the past decade and a half, the American economy continued to grow, despite a dip because of the economic crisis. The use of high-denomination notes also increased -- and particularly outpaced GDP after the financial crisis beginning in 2007. But smaller notes for basic purchases barely grew at all. So where the US economy is up by 65 percent -- small transactions increased only 20%. And $100 notes increased almost threefold -- because they’re used for criminal activities, to avoid tax, and as an alternative to banks amid low-interest rates. Some economists argue that replacing physical currencies with digital ones will reduce crime, increase tax revenue and improve monetary policy. But what’s clear is that Americans spend relatively less cash, but keep more of it around.

All traditional media have suffered, but newspapers most of all.

The African continent has a majorly growing population, and presents an increasingly major market through 2050.  CEOs, take note!

Wednesday, October 1, 2014

'Papa' John Schnatter on Leadership and People

I love football, and often see Papa John's Founder and CEO John Schnatter hawking pizza with Denver Broncos star Peyton Manning in NFL commercials.  Such sponsorship is no small deal, so I was curious to know just a bit more about the prominent pizzeria.  I posted the following videos and articles, along with comments and quotes:

In 1983 John Schnatter converted a closet, bought used equipment, and sold pizza to his father's tavern customers.

Papa John's John Schnatter and NFL Network Steve Mariucci

"Better pizza. Better ingredients." is its tagline. But Papa John's doesn't tell us about those ingredients.

CEOs in general avoid speaking out on politics, but John Schnatter adds his "2 cents" (er, 11 - 14 cents) on Obamacare.

CNN has to extrapolate the math behind the impact of Obamacare, because Papa John's declined to share it, and concludes that ironically it doesn't matter. 

Consistency and collaboration are key ingredients for Papa John's staffers.

John Schnatter gives us 'ballpark' wage figures for his staffers.

Papa John's has 1200+ restaurants in 36 countries and territories

Reference: 'Papa' John Schnatter: Dealing With Fast International Growth.