Management

Andrew Hill Overconfident innovators: handle with care

March 5, 2012 2:28 pm by Andrew Hill

The latest study from the American Finance Association’s Journal of Finance reaches a counterintuitive conclusion: perhaps over-confident CEOs are better innovators. Here’s what it says:

CEO overconfidence is associated with riskier projects, greater investment in innovation, and greater total quantity of innovation as measured by patent applications and patent citations even after controlling for the amount of R&D expenditure. In other words, the R&D investments of overconfident CEOs are more productive in generating innovation [my emphasis].

David Hirshleifer, Angie Low and Siew Hong Teoh rightly point out that this may go against the grain for most business commentators (myself included), who “often point to examples of headstrong, overconfident CEOs who made disastrous decisions”.

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Posted in Management |

Andrew Hill The “tyranny” of US peer-reviewed journals

February 29, 2012 11:59 am by Andrew Hill

David Willetts, Britain’s universities minister, has a bee in his two-brained bonnet about flawed incentives for British business academics.

Prestige in business schools comes from doing research and being published in peer-reviewed journals, he told an audience of managers, academics and members of parliament in London on Tuesday, launching a discussion of whether poor management is holding back growth. It’s a theme he’s touched on before in relation to wider scientific and academic research. Mr Willetts says that as the lead journals are US-based, they tend to be interested in sophisticated analysis of historical, mainly American, industry data:

We’re rewarding British academics and British business schools for analysing American industries… It’s not at all clear to me that this the right set of incentives.

This has an unwelcome tinge of nationalism but it is hard to argue with the underlying point.

Continue reading: “The “tyranny” of US peer-reviewed journals”

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Posted in Business, Management, US |

Andrew Hill FT column: Authentic leadership needs skill to succeed

February 27, 2012 11:34 pm by Andrew Hill

When Texas congressman and US Republican presidential candidate Ron Paul accused his rival Rick Santorum of being “fake” during last week’s televised debate, Mr Santorum pinched himself and said: “I’m real, Ron, I’m real,
I’m real.”

Posted in Management, Politics |

Andrew Hill The glass ceiling – in pictures

February 27, 2012 5:48 pm by Andrew Hill

What does the march of women into senior executive positions look like? Something like this, according to a new Thomson Reuters report:

Progress to the C-suite: the steeper, the better

Each triangle represents one of the 1,965 companies in the Asset4 global database of environmental, social and governance information. If the proportion of female managers out of total management were the same as the proportion in the workforce, the lines would cut the graph in two, bottom-left to top-right. But the lines remain shallow, despite a slight improvement between 2005 and 2010.

As I’ve written recently, an obsession with boardroom quotas is a distraction. Groups that want to fish in a deeper talent pool – and improve innovation and corporate performance – should be more worried about the shallow gradient of these executive lines.

Continue reading: “The glass ceiling – in pictures”

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Posted in Business, Management |
From FT.com February 13, 2012

Gender fatigue is the secret lassitude that grips chief executives and directors when asked for the Nth time to discuss targets, quotas, audits and reports aimed at bringing more women into the boardroom.

Posted in Business, Management |

Andrew Hill Capello’s exit makes Hester look tough

February 9, 2012 12:29 pm by Andrew Hill

A highly paid manager doing his duty for the nation resigns in a huff after his ultimate paymasters interfere with his right to manage. Fabio Capello, manager of the England football team, has done what Stephen Hester, chief executive of state-controlled Royal Bank of Scotland, declined to do.

Mr Hester – who spent most of Wednesday doing interviews to explain his decision to stay, despite the row over his bonus – has told the world that it would have been “indulgent” to resign. At the same time, he has sent a strong message to the government that if it wants to earn a return on the taxpayer’s £45bn forced investment in RBS, it should leave him alone.

To use Mr Hester’s terminology (and assuming that the England manager jumped and wasn’t pushed), by comparison, Mr Capello’s decision looks, frankly, indulgent. If the FT’s Simon Kuper is right, the resignation has less to do with the Football Association’s decision to override his view on whether John Terry should keep the England captaincy, and more to do with England’s poor prospects in the coming Euro 2012 tournament and the potential that it would put a blot on Mr Capello’s reputation.

Continue reading: “Capello’s exit makes Hester look tough”

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Posted in Banks, Management, Sports |

Andrew Hill Reckitt’s brave new world

February 8, 2012 4:28 pm by Andrew Hill

Rakesh Kapoor has been in charge of Reckitt Benckiser for less than a  year but already he’s changed the world. Or, more accurately, he’s changed Reckitt’s view of the world, by merging its European and North American operations into one Amsterdam-based unit, and splitting the rest of the world into two reporting areas.

Like three ugly sisters, the new operations are called Ena, Rumea (Russia, Middle East, Africa) and Lapac (Latin America and Asia-Pacific). Stefan Wagstyl has pointed out on the FT beyondbrics blog that the clear message is that “emerging markets matter” for the multinational consumer goods group.

Reckitt’s change is more than a laborious redrafting of the corporate organigram. Pankaj Ghemawat wrote in World 3.0 that General Motors’ decision to make many of its non-US, non-European operations report to China was “a basic realignment of power”. The impact of Reckitt’s move to aim resources more directly at growing markets could be just as profound.

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Posted in Business, Consumer Goods, Management |

Andrew Hill FT column: Big Pharma should learn from Hogwarts

February 6, 2012 11:51 pm by Andrew Hill

Harry Potter and Viagra have more in common than you may imagine. They came to market within a year of each other in the late-1990s; they enjoyed enormous success; and what was a boon for the companies that produced and sold them could turn into a bane as their popularity fades and rivals emerge.

Posted in Business, Management, Pharmaceuticals |
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This blog is mainly about business and strategy and how and why people who run companies take the decisions that they do.

Most of the time, John Gapper is in New York and Andrew Hill is in London. We occasionally debate business issues between us, but your comments and criticism are welcome.




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About John and Andrew

John Gapper is an associate editor and the chief business commentator of the FT. He has worked for the FT since 1987, covering labour relations, banking and the media. He is co-author, with Nicholas Denton, of All That Glitters, an account of the collapse of Barings in 1995.

Andrew Hill is an associate editor and the management editor of the FT. He is a former City editor, financial editor, comment and analysis editor, New York bureau chief, foreign news editor and correspondent in Brussels and Milan.

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