Monthly Archives: February 2009

Adam Jones

My former colleague Charlie Pretzlik provoked an outraged response from some readers when he trashed Ayn Rand in a 2007 comment piece.

The intervening years have only strengthened his thesis, however, as illustrated by a new article on the BNET.com site entitled ‘Why Do CEOs (Still) Love Ayn Rand?’.

Elswhere:

Adam Jones

Leslie Gaines-Ross, chief reputation strategist at PR firm Weber Shandwick, has emailed me three tips for companies that want to escape the general revulsion felt for big business in a recession.

I paraphrase:

  • Handle job losses fairly and transparently;
  • Emphasise how safe your products and/or services are;
  • Engage with bloggers and those who post comments on blogs.

To illustrate tip number one, she cited as a model of straightforwardness Howard Schultz’s recent memo to Starbucks staff announcing layoffs.

Hmm: I’ve seen worse, but his prose didn’t exactly strike me as a model of plain speech, particularly when it talked of the need to “aggressively re-architect our cost structure” (he does, at least, spell out elsewhere in the memo that this means cost-cutting).

When I raised these concerns, Ms Gaines-Ross stood by her initial judgment:

He coupled the corporate-speak with attention to why the company needs layoffs, how he intends to keep the company’s founding values and employee benefits.

She said it was also interesting that the internal memo was published on the internet for the world to see, meaning that there was no need for leaks or innuendoes.

Any thoughts from the floor?

Adam Jones

Harvard Business School runs a week-long course that helps mothers return to paid employment after taking time out to look after a child or children. It’s called ‘A New Path: Setting New Professional Directions’ and costs $5,000.

On behalf of those mothers whose budgets won’t stretch that far, I asked Professor Tim Butler, the course leader, for some free advice in a new FT Management podcast.

Declaring that active parenting is “project management with a capital P and a capital M”, Prof Butler nonetheless suggests that it can be useful for stay-at-home mothers to do voluntary work in order to keep their CV or resumé relevant.

Among other pieces of advice: keep networking. Yes, that’s easier said than done given the time constraints faced by full-time parents, but it can make professional re-entry a lot less daunting.

You can listen to our conversation through the FT’s podcast player, through iTunes or by just clicking this direct link to the MP3 audio file.

Stefan Stern

Has narrow, monocultural management led us all to disaster? There are those who will tell you it has. Nouriel Roubini, for example. The professor of economics at New York University put forward this view in the Financial Times a couple of weeks ago.

In the financial world, our lousy “Anglo-Saxon” system of supervision and regulation had in practice meant no regulation at all, he said. His comments prompted the arresting headline: “The Anglo-Saxon model has failed”.

Prof Roubini is not Anglo-Saxon. He was born in Istanbul to Iranian-Jewish parents. As a child he lived in Tehran, Tel Aviv and Milan, and speaks four languages. For once, the word polyglot really is justified.

The remainder of the article can be read here. Please post comments below.

Stefan Stern

The FT was first with the news this morning that Dominic Barton, the 46 year old head of McKinsey’s Asian operation, is to become the Firm’s global managing director this summer.

The transition has been handled remarkably smoothly. (I wrote about the process here.)

McKinsey may not strictly speaking be a partnership any more, but it acts and behaves like one. One MD leaves, another steps up, and the great machine moves serenely on. That, at least, is how it has looked from the outside.

It’s probably been a bit livelier than that internally, but the rotters are horribly discreet.

Stefan Stern

I looked up the word “bonus” in the dictionary. I found this definition:

“Something given or paid in addition to what is usual or expected.”

Well, that’s not quite right, is it? In recent years in business and finance, bonuses have been both usual and expected. Then I saw that two other definitions had been provided:

“A sum of money or an equivalent given to an employee in addition to the employee’s usual compensation,” or, in sport,
“A sum of money in addition to salary that is given to a professional athlete for signing up with a team.”

Lexicographers, in other words, have been forced to come up with alternative definitions of the word bonus in response to other people’s use of the word. But we really have done some harm to the English language here. If a payment is going to get made automatically, or almost automatically, then it should be called something else: a top-up, perhaps, or a supplement. If there is no performance-related element - and no element of surprise either - then it is hardly a “bonus”. (You can read an even harsher take on this issue here.)

I’m sure I am not alone in thinking that GE’s Jeff Immelt set the right example when he waived his right to a bonus earlier this week. Now that’s what I call leadership.

Adam Jones

Italy’s Alessi is a master at using imaginative design to transform everyday objects such as kettles and toilet brushes into beautiful luxury goods.

Alberto Alessi, the design house’s CEO, applies a mathematical model to figure out whether a prototype will succeed in the marketplace.

In an interview with McKinsey (registration required), he says the first component of the formula is the degree to which a person would say “oh, what a beautiful object”.

The second is the extent to which customers could make use of the object to communicate their definition of themselves to others (i.e., show off).

The third and fourth components of the formula — and he rather glosses over these, it must be said — are function and price.

The formula doesn’t work for everything. But when we have a long history with a product, it works perfectly. If I have to evaluate a pot or a coffee maker or a kettle, for example, the score indicates exactly the number of pieces that we can sell.

The system certainly seems to produce new products that have a long shelf life: Mr Alessi says half are still on sale a decade after their introduction.

Further reading: Mr Alessi discusses how to compete with China in an FT interview.

Stefan Stern

To adapt that key question concerning the Romans posed by Reg, the not very heroic leader of the People’s Front of Judea in Monty Python’s Life of Brian : “What has HR ever done for us?”

We know the usual answer. It is delivered with a sneer and a derisive snort. HR managers are the “abominable ‘No’ men” (and women, too, of course). They get together to form “business prevention units”. This relentless carping has undermined their self-confidence and surveys confirm that HR people worry that colleagues do not take them seriously. They struggle to influence the corporate agenda.

The financial crisis has only made things worse. HR is summoned to redundancy negotiations but may then be ignored. And now questions are being asked about what HR did or did not do to help avert this crisis in the first place.

The remainder of the article can be read here. Please post comments below.

Stefan Stern

Fortune magazine is reporting that Starbucks is about to launch a new instant coffee product.

A question: will we be able to taste the difference between that and its existing range of drinks?

P.S.  In fairness I think Reuters had this story first.

Stefan Stern

May I draw your attention to an excellent selection of articles and interviews now available on ft.com – the Managing in a Downturn series?

As well as some thought-provoking material from distinguished business school contributors, you can see me in action interviewing Jon Moulton, Sir Martin Sorrell, Archie Norman and Theo Paphitis.

The interviews are short and to the point, and the answers are revealing. Worth a look. (Ignore the hassled-looking interviewer.)



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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