Monthly Archives: December 2009

Stefan Stern

“Christmas time, mistletoe and wine!”

Which is as much to say – the Management Blog is taking a more-or-less well-earned rest, and will be back on January 4 2010, unless something very important happens.

Have a good break. You have earned it.

PS  Thanks very much for making this the fourth most-read blog posting (really!) on www.ft.com in 2009.

Stefan Stern

When I picked up my FT this morning, and saw the headline Business chiefs hit at climate agreement, I was intrigued.

When I read the story – and heard the special pleading of companies claiming they now lacked enough certainty to justify further investment in green technology – I’m afraid I had a very simple and crude reaction:

Come off it!

Since when did genuine innovators wait for legislation or new regulation before developing important new ideas and products? These companies need better PR advice. Better still – they should think for themselves.

Stefan Stern

You see – the best management gurus can write about anything.

Here is Harvard Business School Professor Rosabeth Moss Kanter unpacking the implications for business of the Tiger Woods revelations.

Luke Johnson

A clever entrepreneur I know, called “Peter”, has a favourite parlour game; it works best if the participants are decidedly ambitious. He asks them to choose their personal ranking for three primal motivations: money, power and recognition. Their answer tells them which career steps to take. It is a more practical – and visceral – version of “Maslow’s hierarchy of human needs”, which includes such vague concepts as self-actualisation. Possibly, we should call it “Peter’s hierarchy of human motivations”.

The quiz encapsulates the vital drivers in a blunt but brilliant way. It cuts out the fluff. The ingenuity of the selection is the simplicity: it boils down lots of complicated psychometric testing to three factors. And I like the honesty of the words. Unlike so many questionnaires, it does not pretend that our desires are all worthy. It asks us if we are, in the darkest parts of our souls, avaricious, megalomaniac or conceited.

Some respondents attempt to cheat, and insist their overriding motive is an urge to do good, or a similar affectation. This contest is too ruthless for such stuff. It acknowledges that gentle souls, who really believe in noble causes above all else, are unlikely to rise to the top in business, politics, the media and so forth. They spend their lives working with the underprivileged or the equivalent. And I suspect that they do not meet my entrepreneur friend or read this newspaper.

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

Stefan Stern

A rare event in the business world last week: everyone seemed to agree about something. When Procter & Gamble’s former chief executive, A.G. Lafley, announced he would be retiring as its chairman in the new year, there was universal acclaim for his work at the company. Fortune magazine’s verdict was typical. “It is not overstating things to say that Lafley brought P&G into the next century,” it said.

Well done, A.G. But just to disrupt this mood of consensus for a moment, let me restate my belief that, sometimes, too much attention gets paid to individual CEOs, and not enough to the work that goes on elsewhere inside businesses. A.G. did not invent P&G’s blockbuster cleaning product Swiffer, for example, or lead on every aspect of the company’s merger with Gillette.

How important are CEOs, exactly? “The CEO is responsible for creating and leading the team that will deliver great performance,” says Morten Hansen, professor of management at the University of California at Berkeley, and also at Insead. “A CEO can have great impact by creating a strong team.”

The remainder of this article can be read here.

Stefan Stern

Sorry to bother you with this (!), but you may enjoy Tom Davenport’s latest piece for the Harvard Business Review’s blog.

Stefan Stern

The news that the top 30 Goldman Sachs executives will receive no cash bonuses for 2009 comes, on reflection, as no real surprise. Instead Goldman bosses will receive shares that have to be held for at least five years – an elegant solution.

This is smart. But there seems to be an enormous time-lag in other parts of the financial services industry, with some bankers (anonymous spokespeople, usually) still expressing outrage that their cash bonuses should be questioned and now, in France and the UK at least, taxed.

Most extraordinary of all has been what I like to think of as the angry teenager’s defence. This is sometimes seen when parents come home to find that an unofficial evening of debauchery and drunkenness has taken place in the family home.

“It’s your fault!”, the angry teenager declares. “You should have hidden the drinks better! Yes, I admit I have been sick on the priceless Afghan rug. But you let me do it. You practically made me do it.”

Stefan Stern

The British government’s decision to tax banks on the bonus payments they make to their favourite employees has naturally proved controversial. Gordon Brown received a boost today when the French President, Nicolas Sarkozy, announced a smilar move, while the German chancellor Angela Merkel may now also introduce a bonus tax.

But meanwhile out in Web 2.0 world, the management guru Tom Peters has also voiced his support, via Twitter.

“Through and through capitalist that I am, I say hats off to the UK for its new 6-month, 50% tax on bonuses over $40k,” he tweeted yesterday (@Tom_Peters if you do that sort of thing. I do – @stefanstern).

Perhaps the Brits have started something…

Luke Johnson

So, how was it for you? The last set of board meetings I have attended have all been about the likely outcome for 2009 – and the prospects for next year. Mostly, there is a sense of relief that an annus horribilis is almost over, and a modest hope that the future will be brighter. Inevitably, the projections for 2010 have been in essence financial budgets: a set of estimates about how sales, profits and so forth will unfold in the next 12 months. Very dry stuff – and hardly inspirational.

Having been through this ritual ad nauseam over the years, I am coming round to the belief that an annual plan based almost exclusively on numbers is insufficient. So, turn the whole process upside down: start any document with the qualitative points, while the numerical forecasts are secondary.

In a way, the annual budget might turn into something of a new year’s resolution – a list of firm intentions, rather than just lifeless figures. Instead, there must be some dreams – not sheer fantasy but at least a degree of optimism. Otherwise, why even bother? How else can a business exceed expectations, beyond Samuel Johnson’s “limits of sober probability”?

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

Stefan Stern

Do we really want boardrooms to turn into killing fields for under-pressure executives? Fritz Henderson lasted all of eight months as chief executive of General Motors before being shown the door last week. Not enough change, not fast enough, was the verdict of his unforgiving fellow directors. Would the next CEO please step forward?

It is no surprise that some boards are adopting a more muscular approach. Companies want to be ready to exploit improved trading conditions next year. But will a more abrasive boardroom encourage better decision-making? I have my doubts. Few people will worry if the cosy, country club board of the past is no more. But things may be moving too far in the opposite direction.

“One thing no one ever says to us is: ‘Oh great, we’ve got a board meeting tomorrow!’,” says Steve Wigzell, a partner at Praesta, an executive coaching firm. Some of the top teams he works with report an increased edginess, even unpleasantness, in relationships between directors.

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



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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Elsewhere on FT.com: Luke Johnson

Luke Johnson writes an FT column on Wednesdays on entrepreneurship. He runs Risk Capital Partners, a private equity firm, and is chairman of the Royal Society of Arts.

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Lucy Kellaway, FT columnist and associate editor, offers her solution to your workplace problems in a column in the Financial Times. In the online edition of her Dear Lucy 'agony aunt' column, readers are invited to have a say too.

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