Andrew Hill

The implications, opportunities and challenges of increased longevity are beginning to dawn on many companies, as our Silver Economy series is revealing. But here is one that I don’t believe chief executives have yet focused on: the increased risk that your predecessor, and possibly his predecessor’s predecessor, will still be around to snipe at your strategy. Read more >>

Andrew Hill

No matter how good Total’s preparations, the death of its chief executive Christophe de Margerie in a plane crash late on Monday will have plunged the senior ranks of the French oil group into an emotional, logistical and governance nightmare.

When boards discuss succession planning, they often talk about it in jocular-morbid terms, typically debating “what happens if the CEO is run over by a bus?”. But when such sudden deaths occur, it often exposes just how poorly they have prepared for this type of emergency.

The US-based Conference Board, in a useful note for directors issued last year, pointed out that while three-quarters of S&P 500 companies surveyed in 2011 had succession plans in place, only 83 per cent of those had put in place an emergency succession component. Given that between 7 and 15 US public companies are hit by the sudden death of their chief executive in any given year, the group suggested the fact that a third of large companies had not considered emergency succession was simply not good enough. Read more >>

Andrew Hill

Drones are a useful tool for delivering flags to football pitches, as Albania’s supporters demonstrated on Tuesday night during their national team’s match against Serbia, but they remain an extreme option for same-day parcel delivery. Click-and-collect is the mundane but potentially disruptive approach favoured in the UK – an approach that Amazon, predictably, is about to take to the next level.

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When Bill McDermott addressed SAP America’s annual sales meeting for the first time as their boss in 2003, the audience “reeked of doubt”. But he aimed “to plough through their doubt with my agenda and with certainty . . . At no point in my career have I been so intent, or felt such urgency, to change people’s minds, and their behaviours.”

Andrew Hill

 

Codejam-filled Doughnut – GCHQ head office in Cheltenham (Crown Copyright)

GCHQ – the UK government electronic eavesdropping agency – could be the most innovative employer in Britain. But short of a management-obsessed successor to Edward Snowden daring to leak its org charts, it would normally be hard for anyone to find out.

Its press officers will not reveal their last names, its automated welcome message warns that calls “may be recorded for lawful purposes” (immediately reminding callers of the grey area between lawful and unlawful phone-tapping), and it will say only that it employs roughly 5,000 staff. GCHQ is, however, said to be building a happier workplace for those staff. In fact, its innovative change programme has won a prize. Read more >>

If I were the new chief executive of Tesco and had just learnt my profits were overstated by £250m, that the regulator was investigating and that I had lost the confidence of the world’s best-known investor, my first instinct would be to nail my accountants, shareholder-relations staff and PR people to their desks until they had sorted it out. I would not be urging them to don a smock or a hairnet and head for the front line.

Andrew Hill

If I ever rise to become chief executive of anything and I’m looking for yes-men to people my boardroom table, I shall make sure I employ a bunch of merger and acquisition bankers.

At the end of every quarter, to coincide with the publication of M&A rankings that they yearn to top (while professing indifference), these bankers boast about the fullness of their pipelines, the strong prospect for strategic deals, and, implicitly, the promise of more fees. As the illustration below shows, their outlook is at its rosiest-tinted just before a downturn.

In spring 2001, for instance, as deal volume plummeted, the esteemed Simon Robey, then co-head of M&A at Morgan Stanley, pointed out that “the fundamentals of the business have not changed, so when markets stabilise, we should see announcements of deals that are currently in the pipeline”. A truism, of course, but deals did not recover their 2000 peak until 2006. (A partial hall of shame of retrospectively regrettable M&A banker quotes appears at the bottom of this post.)

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Most people can identify their top priority at work. Generally, it will be the part of the job that is most productive for their employer: for a merger and acquisitions banker, it could be landing a big deal for a client; for a lorry driver, the punctual delivery of an important consignment; for a hospital doctor or nurse, giving vital treatment to a patient.

Two predictions: How Google Works by Eric Schmidt and Jonathan Rosenberg, out this week, will be a bestseller; How Google Works will be rapidly forgotten. In fact, its publication may turn out to mark the peak of popular excitement about, interest in, and support for, almost everything Google touches.

Every time I hear about a company relocating its headquarters I think of the Marvin Gaye song “Wherever I Lay My Hat (That’s My Home)”. A hit for Paul Young in a 1983 cover version, its hummable melody cloaks an unattractive sentiment, voiced by someone with dubious motives.

Andrew Hill

On paper, a good idea: the 50th anniversary edition and its 50-year-old ancestor.

Dominic Barton, McKinsey’s global managing director, says he and his colleagues agreed unanimously that the 50th anniversary edition of the McKinsey Quarterly, just out, should “look forward rather than back”.

But if the consultancy’s claims for the influence of its publication are credible (Mr Barton writes that the Quarterly has helped “set the senior-management agenda” for the past half century), it is worth revisiting that first 1964 edition. It offers a few clues, not only about management trends, but about the future of consulting itself.

The first edition came clearly badged as “a review of top-management problems, published to keep our worldwide consulting staff informed on topics of common professional concern” (my emphasis). In other words, it was at first an internal newsletter. According to McKinsey, an alternative suggested title was the resolutely clunky “Practice Development Quarterly”, but it rapidly became a calling card for “the Firm” and until the 1990s, it was mostly distributed to clients by individual partners along with a personal covering letter. Read more >>

For all the easy talk about the need to repair dysfunctional cultures, it is still one of the hardest management challenges. But even by the thankless Sisyphean standard of such culture-change programmes, the National Football League is beginning at the foot of the hill.

Andrew Hill

The professional services group's logo at the time of its demise in 2002

The half-life of radioactive brands is shorter than you thought. In fact, it is 12 years, according to a bunch of former partners at Arthur Andersen, the professional services group that disintegrated in 2002 after getting far too cosy with Enron, the bankrupt and fraudulent energy company.

They have bravely acquired the rights to “the iconic brand name” for their global tax group – previously and uninspiringly known as WTAS. It is in part a bet on a special type of business amnesia. Read more >>

Andrew Hill

Leonardo Del Vecchio: out with the new, in with the old? (Photo: Paolo Bona)

I’m annoyed with Leonardo Del Vecchio, founder of Luxottica, the sunglasses and spectacles-maker. By retaking the executive reins at 79, he has undermined a recent column in which I contrasted his enlightened approach with the benighted version of family ownership and management practised by Rupert Murdoch. Worse, his decision looks like a step back for the company itself.

Mr Del Vecchio apparently has no intention of installing any of his offspring as chief executive, now the well-respected Andrea Guerra has stepped down. That is good. But when you give yourself the title of executive chairman and you own two thirds of the company, it is hard to say that you have kept the operational and shareholder aspects of your business separate, which I still consider to be the best model. As I wrote in March, “maintaining both ownership and management of a large family business more often than not leads downhill into further confusion, uncertainty and internecine conflict”. Read more >>

If you are a business leader and you yearn to spearhead reforms to British bureaucracy, you have until the end of next week to apply to be the first chief executive of the UK civil service. So far, recruiting the requisite heavy-hitter is proving a struggle.