Monthly Archives: June 2008

Adam Jones

Stumbling chief executives sometimes know that their number is up when shareholders criticise their performance in public. Have we just seen a version of this with Sir Gerry Robinson, the veteran manager, and Gordon Brown?

The former Granada boss has declared that the British prime minister is “showing all the signs of not being a capable leader” and is also bad at delegation. Sir Gerry’s barbs won particular attention because he has been a donor to Mr Brown’s party. That makes him a “shareholder” in my book.

But I’m nervous about the private sector giving the public sector lessons on leadership. Sir Gerry has made TV shows about how to reform the NHS but he hasn’t taken a permanent job there and attempted to do it on a sustained basis.

I suspect most corporate managers are too materialistic, individualistic and status-conscious to spend their most productive years working on a lower salary in the public sector, where the mood may well be less dynamic. Many are too impatient and too easily bored to tolerate the more bureaucratic corners of the state, let alone reform them.

Facing shareholder criticism, chief executives are wise to ask a quick question before walking the plank: how invested is this grumbling investor? Is it a long-termist or only interested in a quick turn?

When they give lectures on political leadership and other elements of public service, private-sector managers open themselves up to a similar question: are they sufficiently invested to be taken seriously? 

Adam Jones

Lego has won plaudits for involving its customers in the planning of new products. This week, McKinsey said more executives should at least think about following the Danish toymaker’s example, in an article hampered by some jargon worthy of Martin Lukes: “distributed cocreation”, anyone? 

Anyone interested in the democratisation of corporate innovation would enjoy Peter Day’s marvellous radio documentary broadcast in October last year, which is also downloadable as a podcast. Mercifully, the BBC man survived the attack by the Lego scorpion robot.

Elsewhere:

  • Marketing is broken down into five easy pieces;
  • William Weldon, Johnson & Johnson’s chief executive, tells how its new ideas float to the surface;
  • Business school applicants who used an illegal GMAT test prep site called Scoretop may have their scores cancelled (also click here for the official press release);
  • An unemployed banker pounds New York’s streets wearing a sandwich board in the hunt for a job.

If you’ve stumbled across any good content that illuminates management issues this week, please post the link below.

Adam Jones

Improving Decisions About Health, Wealth and HappinessA few weeks ago I walked past a busking harpist in Lausanne’s main train station. The busker was good but as I was pulling out some loose change, I noticed that there weren’t any coins in the instrument case that lay open in front of him. This made me worried that maybe he was just doing it for pleasure, so I put my Swiss francs back in my pocket.

Poor guy. In retrospect, he was clearly playing for cash but he had failed to learn the most basic rule of busking: always leave a few coins in the hat or instrument case as a way of suggesting that others should do the same thing.

This is the sort of anecdote that would interest Richard Thaler and Cass Sunstein, two University of Chicago academics who have authored a book called Nudge: Improving Decisions About Health, Wealth and Happiness. They are preoccupied by the ways in which businesses and policymakers influence behaviour by controlling the framework within which choices are made.

They call these people “choice architects”. My busker was a lousy example of the breed.

Adam Jones

Stefan and I both watched last night’s excellent BBC investigation into the use of child labour in the making of some clothes sold by Primark, the discount retailer present in Ireland, the UK and Spain.

Primark took action to address the failings exposed by the show before it was aired. Last week, it said it would stop buying clothes from three Indian factories that had, without Primark’s knowledge, used unapproved sub-contractors that in some cases employed children.

But did it act too hastily? War on Want, the charity, has criticised Primark for sacking the three suppliers, arguing that such a move unfairly threatened the jobs of lowly workers. The ethical lapses were, in its opinion, an inevitable consequence of the fast fashion business model.

A Primark director has issued an angry justification of its action, saying the company had been deceived. “The relationship was broken,” she said, adding that it was “extremely sad” that innocent staff would be affected, and that the move was only taken as a last resort.

Do companies such as Primark have a responsibility in poor countries to retain and retrain suppliers that fail to meet their ethical standards? We’d like to hear what readers think.

Stefan Stern

You could hear the squeals of agony all over Mayfair. Whatever next? The UK markets regulator, the Financial Services Authority, had had the nerve to toughen up the regime on short-selling.

From now on any investor holding short positions in more than 0.25 per cent of stock in a company conducting a rights issue would have to own up to it. No more lurking in the shadows, unloading shares in a cash-strapped business that you planned to buy back soon at a much lower price.

My word, but the hedgies were upset. Did the FSA not realise how much money some of the guys were making out of all this? Really, if the regulators are going to try to suppress the genius of capitalism and free markets in this way, we may as well all go and live in Moscow, or Pyongyang.

Continue reading ‘Column: The nature of ownership’

Adam Jones

“Can you give me a pay rise?” is not the hardest question that an underling can throw at their boss. “What do you do all day?” is often the killer.

The contribution of a good manager to a team’s performance can be subtle to the point of appearing non-existent. After all, they aren’t out in the trenches closing sales, devising new products or doing other things that are instantly recognisable as work.

Spooked by the lack of measurable output, many (bad) managers revert to doing the hands-on tasks they used to be responsible for before they got promoted to a management role. It is an understandable temptation: these were the things that got them noticed and praised by the big bosses, after all.

A documentary I watched over the weekend made me think of this tension implicit in jobs that involve overseeing others. It was about Quincy Jones, the music industry legend who produced Thriller, Bad and many other best-selling albums. 

Stefan Stern

Some talk of the Rumble in the Jungle.

Others recall the Thriller in Manilla.

But last week I was lucky enough to witness Dialectic in the Park.

Let me explain. London Business School was hosting a half-day seminar entitled “Humanising Work”, held under the auspices of the Lehman Brothers centre for women in business.

Two great names from the world of sociology, (Lord) Anthony Giddens and Richard Sennett, both gave fascinating talks. Giddens discussed the addictive nature of work, while Professor Sennett, who is based at the London School of Economics, spoke about managers’ loss of control over the organisations they are supposed to be managing.

I referred to Lord Giddens’ talk in my column on Tuesday, and will be discussing Prof Sennett’s thoughts next Tuesday. Speaking purely for myself, it was a very efficient afternoon out.

But why am I bothering to tell you this, apart from the obvious attraction, to me, of naked self-promotion?

Just this: we instinctively look to so-called management gurus and business school academics for ideas and enlightenment. But some of the biggest ideas that might help us understand contemporary business life could come from other, perhaps unexpected sources.

You might not have thought that a sociologist could help you run your company better. But, at least as far as these two distinguished gentlemen are concerned, you would be wrong.

Tom Peters – a genuine, honest-to-goodness management guru – says that when he is at an airport he makes a point of picking up magazines he wouldn’t normally have read, to make sure he is regularly being confronted with new material. Worth a try.

Adam Jones

John Quelch of Harvard Business School has published some tips on how to package price increases without alienating customers. But McKinsey says a large number of executives don’t feel they can hike prices over the next six months in spite of soaring input costs.

Elsewhere:

  • How to pitch ideas the Hollywood way (and why you shouldn’t try the elevator pitch in an elevator);
  • Carlos Ghosn fields questions on leading two companies – Renault and Nissan – at the same time;
  • Boston Consulting Group talks about outsourcing and the global supply chain in an orgy of interviews and podcasts;
  • How businesses can learn from the Sadler’s Wells dance theatre;
  • A senior Facebook honcho tells Stanford students about the early days;
  • The top ten challenges facing personnel directors (or “talent development officers”, if you can tolerate HR jargon).

Stefan Stern

Europe, old and new, has played host to George W Bush this last week. It was billed as a “farewell tour” – not au revoir, you notice. Farewell.

Europe and Dubya have never really hit it off, with the exception of Britain’s Tony Blair, of course. The suspicion, and lack of affection, was mutual.

Bush, a self-styled “war President”, had his plans for office completely destroyed by the events of September 11 2001. He had barely been in power for nine months on that bright September morning.

We will never know what his Presidency would have been like, given calmer times. As a candidate, he had talked of “compassionate conservatism”, of building an education system where “no child is left behind”. It is fair to say that events, and economic downturn, distracted him from these attractive-sounding goals.

Bush was also the first US President to hold an MBA (from Harvard). He was a believer in Peter Drucker’s “management by objectives” (MBO) approach. I am not sure that his record in office has done a great deal for the reputation of either management education or management gurus.

The US electorate may opt for a dramatic change come November, if the polls giving Senator Obama a healthy lead can be believed. The country could soon be under new and very different management.

And former President Bush may be looked on as one of those CEOs who grabbed the top job full of hope, but then failed to live up to the high expectations he himself had created.

Stefan Stern

“To every thing there is a season,” says Ecclesiastes, “and a time to every purpose under heaven. A time to be born, and a time to die…a time to kill, and a time to heal…a time to weep, and a time to laugh; a time to mourn, and a time to dance…”

What would that gloomy old soul have to say about the life of the modern manager? “A time to work, and, er, that’s it.”

Many would see nothing wrong in this approach. Sir Alex Ferguson, the highly successful manager of Manchester United football club, is a good example. Asked last month how he felt about his latest triumph of winning the European champions league, he admitted that, of course, he would be celebrating that evening.

But: “The thing about me is that I won’t get carried away with it, and tomorrow morning I will be thinking about next season,” Sir Alex went on: “It drains away very quickly – that drug, that final moment. I will be thinking about the future and looking into the players’ eyes to make sure their hunger is still there.”

Drive, hunger, ambition: today’s workplace seems to demand more and more of such stuff.

If you are serious about getting on in your career or leading your organisation on to greater success, a strong sense of urgency is required.

Continue reading Column: The addictive drug of success



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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