Monthly Archives: September 2008

Stefan Stern

Sorry, Mr Welch. Tough luck, Mr Ballmer. No hard feelings, Mr Lafley. You may think people see you as a management role model. But you will never be able to compete with those true aspirational figures – the managers of elite sports teams.

Legends grow up around the powerful coaches who lead their teams to success. Think of Red Auerbach, coach of the formidable Boston Celtics basketball team (key soundbite: “Show me a good loser, and I’ll show you a loser”).

Or Vince Lombardi, inspiration behind the Green Bay Packers gridiron team (key soundbite, possibly wrongly attributed but that is not the point: “Winning isn’t everything, it’s the only thing”).

Continue reading “Stay onside with Wenger“.

Adam Jones

If your boss starts talking to you about dividing teams into “pods” today, it won’t be because they have just had a life-changing experience swimming with dolphins at the weekend. They will be talking about golf.

Paul Azinger, captain of the US team in the recent Ryder Cup, has told the Wall Street Journal about the organisational theory that lay behind its victory.

Using advice from Ron Braund, a corporate team-building specialist, the 12 squad players were grouped in “pods” of 4 throughout the competition. Each pod had an assistant captain to help its members.

One of the aims was to stop quieter personalities from getting lost in the broader group. Another was to meld players accustomed to performing as individuals into a team.

There is an alternative explanation for the US success, of course: the absence of Tiger Woods, which might have made the mere mortals on the team feel less inhibited. But management theory is written by the winners so let’s go with Mr Azinger’s version.

Adam Jones

The draft of the US financial bail-out bill – or troubled asset relief programme (Tarp) – has supposedly been designed in such a way that failed executives will not be able to “dump their bad assets on the government, and then walk away with millions of dollars in bonuses”.

But will these curbs on executive pay work in practice? And could they/should they be deployed elsewhere?

To summarise as best as I can – this is dry, specialised stuff – the act says:

  • Executives in financial institutions from which the government has directly purchased toxic assets in return for a “meaningful equity or debt position” must not be given incentives to take “unnecessary and excessive risks that threaten the value of the financial institution” while the state holds an equity or debt position in that organisation (page 31);
  • During that period, these same financial institutions must have the power to claw back any bonus paid to a top-5 executive based on performance measures that later turn out to be materially inaccurate (page 31);
  • During that period, there will be no “golden parachute” payments for top-5 executives at these institutions either (page 31);
  • Meanwhile, no new “golden parachute” deals are allowed for senior executives at financial institutions from which the government has bought more than $300m of toxic assets through both direct purchases and auctions, and in which it took a meaningful equity or debt position that has not yet been fully unwound (page 32);
  • These same institutions will lose some tax deductions if they pay their CEO, CFO or highest-paid employee more than $500,000 in a year (page 99-105).

Take a look at the text yourself and say whether you think it all sounds clear or plausible.

Stefan Stern

Management is a moral task above all. Lives, and people’s well-being, are at stake. In the current frenzy of financial meltdown, with talk of $700bn bail-outs and widespread mortgage foreclosures, it might be as well to remember that.

Maybe I’m just an old Leavsite at heart, but I do like a good morality tale. When news of Paul Newman’s death came in over the weekend, I thought immediately of this superb speech (below) from the film The Verdict (1982, directed by Sidney Lumet, script by David Mamet). If you haven’t seen the film, get hold of a DVD at once.

If you need any persuading of just how good an actor Newman was, compare this rather stark, deceptively quiet text with the shattering performance Newman actually gives. It’s devastating stuff.

[In the film, Newman plays an alcoholic lawyer, Frank Galvin, who sees the chance for redemption in what may be his final case. This speech is his summing up to the jury which comes towards the end of the film.]

GALVIN

You know, so much of the time we’re lost. We say, ‘Please, God, tell us what is right. Tell us what’s true. There is no justice. The rich win, the poor are powerless…’ We become tired of hearing people lie. After a time we become dead. A little dead.  We start thinking of ourselves as victims. (pause) And we become victims.  (pause) And we become weak…and doubt ourselves, and doubt our institutions…and doubt our beliefs…we say for example, `The law is a sham…there is no law…I was a fool for having believed there was.’ (beat) But today you are the law. You are the law…And not some book and not the lawyers, or the marble statues and the trappings of the court…all that they are is symbols. (beat) Of our desire to be just… (beat) All that they are, in effect, is a prayer…(beat)… a fervent, and a frightened prayer. In my religion we say, `Act as if you had faith, and faith will be given to you.’ (beat) If. If we would have faith in justice, we must only believe in ourselves. (beat) And act with justice. (beat) And I believe that there is justice in our hearts. (beat) Thank you.

Adam Jones

Picking up on the Management Blog’s scoopette about McKinsey advising Wall Street investment banks to spend less on consultants, the Economist today looks at how the broader, $309bn-a-year management consulting industry will be affected by the carnage in the markets.

While noting that revenues seemed to hold up well in the first half of the year, it said the industry faces the prospect of cancelled contracts and possible consolidation. Moreover, consultants need a new product to sell, it reckoned:

All consultants agree that emerging markets such as China, India and the Middle East offer the best opportunities for the future. But they accept that most of their business will come from the developed world for a while yet. So the industry badly needs a “Big New Idea” that it can sell to clients there. Previous consulting booms were built on ideas such as “total quality management” and re-engineering. But at the moment consultants have no successor to such money-spinners.

Does anyone know any management consultants specialising in advice to the management consulting industry? There could be an opportunity there.

Stefan Stern

A fascinating chat with Canadian web guru Don Tapscott – author of Wikinomics – who was passing through London last week. His new book, Grown Up Digital – how the net generation is changing your world, is out later this year.

Mr Tapscott prefers the term “net generation” to “generation y”, as for him it helps signal that the under 30s are truly different, and not just the next cohort to come along.

“These kids have different brains,” he told me. “They have bathed in [computer] bits.”

I look forward to reading the new book, which promises to offer useful insights into these young multi-media heroes.

But the remark that really stayed with me was Mr Tapscott’s confident – very confident – assertion that “Obama will win”. “He has 13.4 million under 30s, all talking to each other on Facebook, and they are going to vote. This is unprecedented,” he told me.

“Obama will win.”

I merely report these words without further comment.

Adam Jones

It might not seem like it at the moment but Robert Peston is not the only business journalist at the BBC. Peter Day is still offering excellent insights into management fundamentals on BBC radio.

The latest edition of his ‘In Business’ show – which can be heard online or via podcast download – covers branding and new product development. Learn why prosaic lower-sodium soups were a hit for Campbell’s, and why eggs shouldn’t go in the toaster.

I was delighted to hear him chat to John Murphy, a branding expert I once interviewed for an article on brand euthanasia. Mr Murphy founded one of my favourite brewers, St Peter’s. If you are in London and need a calming pint after another week of grim uncertainty, head for its Jerusalem Tavern.

Elsewhere:

Stefan Stern

Review of A Sense of Urgency
John Kotter
Harvard Business Press
$22/£11.99

Back-to-back meetings, an exploding e-mail inbox, an ever-longer working day and almost permanent jet lag – this is the familiar world of today’s frenetically busy executive.But now a distinguished author says that what so many of us really lack is a sense of urgency. Is this guy for real?

He is. John Kotter, emeritus professor at Harvard Business School, has a clear and simple message.

What most of us think of as urgency, as busy-ness, is not actually making things any better. This false urgency is stressful, exhausting and unproductive.

True urgency may sometimes involve moving fast. But the most important aspects of true urgency are relentlessness, steadiness and the purposeful pursuit of a goal while “continuously purging irrelevant activities to provide time for the important and to prevent burn-out,” says Kotter.

The author is perhaps the business world’s favourite guru on the subject of change.

His book Leading Change (1996) has become a classic, with its eight-step programme for managing change effectively.

Step one in Kotter’s approach was to create a sense of urgency. Now, a decade after publishing his best-seller, he returns to consider this first step at greater length.

He has done so because he has become convinced that this sense of urgency is overwhelmingly the most important factor if change is going to be handled successfully.

Adam Jones

The point made in my last post about the potential influence of religion on business is reinforced by comments made last night by John Sentamu, the Archbishop of York and an article by Rowan Williams, the Archbishop of Canterbury.

Dr Sentamu castigated HBOS short sellers during a speech at the annual dinner of the Worshipful Company of International Bankers:

To a bystander like me, those who made £190m deliberately underselling the shares of HBOS, in spite of its very strong capital base, and drove it into the bosom of Lloyds TSB Bank, are clearly bank robbers and asset strippers.

We find ourselves in a market system which seems to have taken its rules of trade from Alice in Wonderland, where the share value of a bank is no longer dependent on the strength of its performance but rather on the willingness of the Government to bail it out, or rather on whether the Government has announced its intentions so to do.

Adam Jones

Tony Blair is helping to teach a course on Faith and Globalisation at Yale University. Organised by its schools of divinity and management, the course seems, on first glance, to be preoccupied with the divine rather than the managerial.

The accompanying website contains sections on “faith and violence”, “faith and reconciliation” and “faith and human rights” — but relatively little about faith and commerce.

However, Joel Podolny, dean of Yale’s management school, assured me that MBA students taking the course will receive practical guidance on how religion can affect corporate strategy, personnel management and leadership. After all, these can be big issues for business.



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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