Monthly Archives: March 2008

Adam Jones

Tom Glocer, chief executive of Reuters, clearly takes his blog very seriously. For instance, it contains an endearingly pedantic list of his favourite musicians, including Mahler, Grateful Dead, Kanye West and “Kool & the Gang (early)”.

The precision of that final entry marks him down as a man who wants to be thoroughly understood, who wants his staff to know that while the deep funk of 1973′s Jungle Boogie might get him on to the dance floor at the Christmas party, the post-disco pap of 1984′s Cherish will leave him frozen to his chair in horror.

Flippancy aside, the ability to convey to the world exactly what you are about is a great skill for a manager to have – and it looks like Ron Sandler, the new chairman of Northern Rock, might also have the knack.

Adam Jones

If history is a reliable guide to the future, McKinsey says corporate earnings in the US might fall by as much as 40 per cent from their 2007 levels, even though “few companies as yet anticipate such a blow to their earnings and general economic health”.

It bases this exceptionally bleak claim – contained in an article posted on its McKinsey Quarterly website – on an analysis of the historic relationship between corporate earnings and GDP, plus return on equity trends.

The consultancy provided some advice for executives to accompany its warning.

Adam Jones

Bill Price, the former vice-president of global customer services at Amazon, has co-authored a book that sounds like it could be useful, judging from the review in today’s FT. The argument of The Best Service Is No Service is that customers mainly call when something goes wrong or to find out basic ”where can I get?” or ”how do I?” information. It suggests that resources can be freed up for the handling of profitable sales enquiries if operational errors are avoided and the flow of information improved. You can read the first 28 pages here.

It was also interesting to hear Luke Johnson declare earlier this week that he used to read all complaint letters in the days when he chaired PizzaExpress, the British restaurant chain; he says employing people who enjoy their work is crucial to ensuring good service, more so than providing them with the best training. (The introduction of thinner, crispier bases at PizzaExpress has ensured that there will be no complaint letters to the current boss from me).

Finally, the airline sector in Japan looks to be a customer service case study in the making. This analysis piece in today’s FT details the friction between the low-cost airline model and the lavish customer service that is normal in Japan.

Adam Jones

Why has AG Lafley been so successful at running Procter & Gamble?  According to Roger Martin, dean of the University of Toronto’s Rotman School of Management, Mr Lafley is a great example of the superior leader who doesn’t reduce management to a series of “either/or” choices. Instead, he has been able to blend two seemingly incompatible courses of action into a very effective strategy.

In his recent book, The Opposable Mind, Prof Martin tells how P&G was being pushed in two different directions when Mr Lafley became chief executive in the dark days of 2000. On the one hand, the maker of Tide detergent and Crest toothpaste faced pressure to cut costs in order to compete more aggressively with own-brand goods. Yet there was an opposing school of thought that said the path to salvation lay in going upmarket by using expensive innovations to differentiate P&G brands from the me-too products.

As Prof Martin tells it – and as an advisor to Mr Lafley he has had a privileged view of the turnround - part of the genius of the P&G boss was in finding a way to reconcile these two positions into a synthesised whole that managed to satisfy both constituencies. Costs were cut but there was also a new emphasis on design and on importing external ideas that helped P&G to charge higher prices. Prof Martin calls this have-cake-and-eat-it approach ”integrative thinking”.

In this 9-minute audio interview, I chat to Prof Martin to find out how managers can structure their own problem-solving in order to avoid simplistic binary oppositions.

Stefan Stern

It’s getting bad out there. Banks have stopped lending. Customers have stopped buying. Toshiba, Siemens and EasyJet have all issued profits warnings in the past few days. Chrysler is shutting down for two weeks in July.

I know! Why don’t we hire loads of new salespeople and get them out on the road, knocking on doors? That’s bound to change our luck.

It is not April 1. The idea of reviving door-to-door selling comes from the Boston Consulting Group. The distinguished consultancy recently published a paper in their “Opportunities for action” series called “Door-to-door sales: the forgotten channel”.

Continue reading “Desperate sales measures”

Stefan Stern

When in doubt, turn to La Rochefoucauld:

“Nous sommes si accoutumés à nous déguiser aux autres qu’enfin nous nous déguisons à nous-mêmes.” (Maximes 119)

(We get so used to disguising ourselves to others that we end up becoming disguised to ourselves.)

There’s nothing like a good dose of French scepticism to shake you up in the morning. The noble duke’s words came to mind recently when a new DVD landed on my desk. Offering an “expert’s guide” to interview skills, it was accompanied by a press release that was headlined: “Don’t just look the part, act the part.”

The training film is divided into sections such as “Ensure you are instantly liked”, “Breeze past tricky questions”, and “Close the interview with style”. All your problems solved for just £14.99. How deep can the crisis in capitalism really be if the market is still coming up with products like this?

But the DVD’s producers have, perhaps without realising it, hit upon a recurring management challenge. How should you present yourself to the world? What sort of leadership style does the situation demand? Or should you simply ignore such thoughts as you get on with the business of “being yourself”?

Continue reading Know who you are meant to be

Adam Jones

The BBC World Service has been playing a fun game on its books programme, The Word. It has been asking listeners to sum up their lives in six words - an idea borrowed from Smith, a US magazine.

There have been some wonderful mini-memoirs sent to the BBC, my favourite being “squandered more chances than others get”, submitted by a mournful man in the Netherlands.

It made me wonder whether the same approach might work in summarising the leadership style of top managers. 

Adam Jones

leslie-gaines-ross.jpgWith the Société Générale and Northern Rock sagas, it is a good time to be in the business of advising errant companies on how to restore their lost reputations. Leslie Gaines-Ross (left), chief reputation strategist at PR firm Weber Shandwick, has just written a book on the subject entitled Corporate Reputation, 12 Steps to Safeguarding and Recovering Reputation. She braved Monday’s storm to give me her opinion on how ceos should apologise when they or their organisations make mistakes, while also addressing topics such as whether or not a company should engage with hostile bloggers. Listen to the 8-minute audio interview here.

Continuing with the theme of SocGen and angry bloggers, the French bank features in a rant from tompeters!, the management guru we knew as Tom Peters in a more conventionally punctuated age. Writing from his farm in Tinmouth, Vermont, tom has just used his blog to have a pop at Daniel Bouton, the bullet-headed SocGen chairman who is somehow still hanging on to his job after the Kerviel affair. It’s part of a broader tirade about executive pay. Other ceos who feel his wrath include Boeing boss Jim McNerney and Fidelity’s Peter Lynch. This is tom‘s understated conclusion:

I don’t want The Law to muzzle exec pay. But I would like common sense to prevail, or at least make the occasional appearance. The 500 Fortune 500 CEOs are no more flawless, genius, etc., than my dog Dodger, who, trust me, via his own sort of Excellence, can reverse the tide and part the waters by producing a fart that carries on the wind from Tinmouth VT all the way to Wall Street.


Stefan Stern

You are 40 years old, head of China investment banking for Merrill Lynch, the pride of your family and clearly destined for greatness. So, Wilson Feng, what do you say to the Bloomberg reporter who phones you up and asks for an interview?

“I want to change my life,” Mr Feng said. “It’s a nightmare. My father won’t recognise me if I stay in investment banking.”

Mr Feng is off to go and work for a state-owned Chinese company. “Salaries at state-owned enterprises are low compared with investment banking, but you can have a better life,” he explained. Merrill Lynch is gutted. “It’s sad to see him go. He was a model employee,” said Damian Chunilal, head of Pacific Rim investment banking.

Continue reading “The meaning of life at work”

Stefan Stern

The UK’s Combined Code on Corporate Governance requires public companies to comply with its recommendations, or explain why they have chosen to ignore them. As of today Marks and Spencer has a lot of explaining to do.

From 1 June, the company said today, Sir Stuart Rose will become executive chairman, effectively combining the roles of chair and CEO. This flies in the face of Combined Code orthodoxy. True, other colleagues are stepping up to take on some of Sir Stuart’s duties. Ian Dyson, currently finance director, will take on the additional responsibility of HR and operations. Kate Bostock, head of women’s wear, and Steve Esom, head of food, join the board.

Sir Stuart now says he will not leave the company before 2011, thus allowing his fellow executive directors time to build their case to win the top job in due course.

Shareholders and analysts will be concerned that this move formally concentrates too much power in Sir Stuart’s hands. One, L&G, went on the record with its objections only a few hours after M&S’s announcement.

Personally, I will take some of the governance gurus’ objections with an unhealthily large pinch of salt. Sir Stuart is clearly his own man, and has been well and truly in charge at M&S for several years. Lord Burns, the outgoing chairman, says that execs and non-execs alike at M&S are happy with the new arrangements. Where is the problem?

If Sir Stuart were a crook, or an incompetent, we might have grounds for concern. But this is someone who turned down the prospect of absolutely gigantic rewards, running M&S for Sir Philip Green’s private equity-style bid in 2004, and instead took the riskier and relatively much less well paid option of keeping M&S public. He has done an excellent job so far. If this is his chosen method of exit, and this seems to him to be the best way of blooding a successor, I think we should trust him and back his judgment.

Of course, if things now go badly wrong for him and the company I will be among the first to condemn him.

About the authors

Stefan Stern writes a column on Tuesdays on management. He is winner of the 2010 Towers Watson award for excellence in HR journalism, and has previously won awards from the Work Foundation and the Management Consultancies Association.

Ravi Mattu is the editor of Business Life, the FT's management features section, and a former editor of the Mastering Management series. He joined the FT in 2000 from Prospect magazine

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