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MYSELF AND OTHER MORE IMPORTANT MATTERS. By: Charles Handy NY: AMACOM, 2008. ISBN-13:978-0-8144-0736-7 REGULAR PRICE: $25.00 BOARD OPTIONS/AMAZON PRICE: $16.50 |
Charles Handy has had a most interesting professional life. His roles have included global executive with an oil company; academic administrator who developed a framework for business education for Britain; head of a think tank based in one of the Queen's official residences, a commentator on life for the BBC Radio, and a best selling author. This is a man worth getting to know The book's title is accurate. While the basic framework is Handy's life story, it really is a platform for his much broader discussion about capitalism and where it is going. To cite one concrete example, Charles Handy coined the term "Shamrock Organization" to refer to the structure of the corporation of post industrial Capitalism. One leaf of the Shamrock is a core of full time employees. The other leaves are interim employees brought in for project assignments (think temporary retail employees brought in around Christmas) and specialists brought in to solve complex problems beyond the time/competence of the full time team. This Shamrock Organization has three leaves. I think most of us would recognize that there is actually a fourth leaf in the Shamrock: suppliers who so readily integrate themselves into the company, it is hard to distinguish them from the core employee group. Think of the people who sell mobile phones at Staples or Costco. They are not part of the organization and yet they are part of it. Handy pointed out the Shamrock organization yeas ago and gave it a name. He said that within the Shamrock, who lives on what leaf of the Shamrock is terribly important. But the customer only sees the entire Shamrock and doesn't care about the individual leaves. The implication about Handy's acute observations are still not effectively dealt with by corporations. Most talent management policies focus only on the full time employee group while ignoring the others components. If indeed the customer only sees the entire Shamrock, who should be invited to the company picnic? Who should be eligible for bonuses? Another Handy gem for Board consideration is to ask, "If this product or service did not exist, would we invent it today?" I find that a simple and powerful question. Let me quote the following paragraph about the use of cliché's to drive business: "The language organizations have invented for themselves is pretentious, unrelated to what actually happens on the ground. Every organization claims that they care deeply for its customer, although you might be dubious if you are still trying to get to their helpline after forty minutes. Every organization proclaims that their employees are their most previous asset, even while making swathes of them redundant. Every business is committed to excellence and to aiming for world-class even though research suggests that only a tiny few achieve it. Then there are the pseudo-technical terms that make the obvious seem clever: core competencies, JIT, 360 Feedback, CRM." I could go on and on and on. You get the picture. Now get this book. Laurence J. Stybel Board Options, Inc. |
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EXECUTING YOUR STRATEGY: how to break it down and get it done. By: Mark Morgan et al Boston: Harvard Business School Press, 2007 REGULAR PRICE: $29.95 BOARD OPTIONS/AMAZON PRICE: $19.77 ISBN 978-1-59139-956-8 |
Mark Morgan is Chief Learning Officer at IP Solutions, Raymond Levitt is Professor at Stanford University's Engineering School, and William Malek is Strategy Execution Officer for Strategy2 Reality. LLC. The three authors are associated with the Stanford University Advanced Project Management Program (APM). The authors point out that the business landscape is littered with expensive, well-intentioned strategies. The authors believe that leaders overestimate their company's ability to make the day-to-day operational changes necessary to implement the vision. The authors state: "Executives have a tendency to think this kind of work as being too "tactical" to take up their precious time. Nothing could be further from the truth. Some executives get this, but too many don't." The authors argue that the "journey from boardroom to marketplace must pass through project management." The rest of the book provides a structure to link strategy with day-to-day operations management. Cases are presented to illustrate their concepts. This is a great business journal article that has been blown up to become a forgettable book. I would urge the authors to write an article (not a book please!!) about what needs to be done at the Board of Director level to insure that shareholder money is being spent in ways that are advance a few key strategic goals approved by the Board. For example, the audit committee does look to see if money is being spent prudently. To the best of my knowledge, it doesn't ask itself "Here Are Five Strategic Goals and Here Are Seventy Discrete Projects. How do these Seventy Projects Advance the Strategic Goals?" Laurence J. Stybel Board Options, Inc. |
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By: John Naisbitt Regular Price: $24.95 Board Options/Amazon.com Price: $15.72 ISBN 978-0-06-113866-7 |
John Naisbitt is the popular business thinker who helps leaders understand what comes next. In MEGATRENDS, he spoke about "high tech/high touch" being key for success in the future. In GLOBAL PARADOX he warned that the reality of a global market will set off a simultaneous increase in tribalism. In this book, Naisbitt is less concerned with predicting the future but in disclosing the way he thinks through the information he reads: "Mindsets work like fixed stars in our heads. Holding on to them, our mind finds orientation. They keep it on course and guide it safely to its destination." There are eleven mindsets in the book. But the premier one is "Understand how powerful it is not to have to be right." I find that easy to say. My favorite Mindset is "While Many Things change, Most Things Remain Constant." Leaders can be driven into hysteria by the drumbeat of change, change, change. Naisbitt does acknowledge that actually fads, fashion, and technology do change dramatically. But most of the core goals of people's lives remain constant. Most change is in how we do what we do. The reasons why we do what we do tend to be as stable as men's fashion. Home, family, and work are the great constants. The rhythm of life is still determined primarily by the seasons. As leaders are we reacting to temporary fads or responding to true trends. One true trend is that professional sports will be the framework for talent management in business And local sports teams seek the best talent on the planet On opening day of the 2006 baseball season, 30% of all major-league players were foreign-born In the minor leagues, 50% of the players are foreign born The 2005 National Basketball Association champions were the San Antonio Spurs Seven of its 12 man team were not from the United States Outsourcing of talent is not just about shipping low wage jobs overseas There will be "amazing opportunities" for talented individuals to serve on a global basis And there will be "amazing opportunities" for small to medium sized firms to be outsourced providers to large companies. Laurence J. Stybel |
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Reg. Price: $25.00 Board Options/Amazon Price: $16.50 ISBN 1-59139-720-0 |
John Hagel is a Senior Advisor at McKinsey & Company. For two decades, John Seely Brown was Executive Director of the legendary Palo Alto Research Center. The authors argue that the only sustainable edge is to generate shareholder value through constant innovation. Current approaches to strategic thinking are inadequate to the task. The book has one irritating quality and one large value for Board members. This is a small booked packed with lots of ideas. I was distracted by the use of “new words” to describe old concepts. It is almost as though the authors are trying to invent a new vocabulary using concepts that could be best explained in plain English. Examples of this business psychobabble include “radical incrementalism,” ”performance fabrics,” “process networks,” and “productive friction.” These are really not new concepts but they have invented new words. I want to read a business book that would help me improve my company’s effectiveness. I didn’t sign up to learn a new language. The good news is that Boards and CEOs ought to carefully consider their matrixed approach to talking about strategy. They call this matrixed approach “dynamic specialization.” The current fad is to talk about business models organized along industry lines. The authors argue that industry focus is insufficient for a proper conversation about strategy. Within that industry-focused model, there needs to be a second strategic focus. They see this new strategic focus along three dimensions: Infrastructure Management. Financial services, pharmaceuticals, and the computer industry are already structured in significant ways along these lines. State Street Corporation is an example of a company that services the financial services industry but its value clearly revolves around infrastructure management. UPS revolves around infrastructure management of logistics. An infrastructure management theme works well for relatively routine, high volume business activities. Product Innovation. Specialized biotech companies are taking on more of R&D activities so that large pharmaceutical companies can focus on scale intensive manufacturing and distribution. There are specialty design shops that serve the fashion industry. There are specialty semiconductor design shops that serve the electronics industry. Customer Relationship. These firms concentrate on identifying target customer segments, getting to know that segment very well, and using its resources to mobilize third party products and services to address the needs of their customers. Physicians who practice general medicine, financial planners, real estate agents, and attorneys all provide this framework. Accenture is a company with this type of framework. From a strategic perspective, most companies today like to say that they do all three types of services within their walls. But each approach requires different economics, different skills, and different cultures. When Boards accept the CEOs notion that all three models are appropriate in the strategic mix, the inevitable implication is sub optimization of one or all of these strategies. This sub optimization increases company vulnerability to its more focused competitors. Laurence J. Stybel Boardoptions.com |
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By Jeswald
W. Salacuse ISBN
0-8144-0855-9 REGULAR
PRICE: $27.95 BOARD
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SAVE: $9.50 (34%) |
Jeswald Salacuse is Professor of Law at the Fletcher
School of Law and Diplomacy at Much
of today’s literature on leadership use sports or military analogies. Indeed successful Generals and Coaches often
command premium speaker fees to speak to leaders about leadership. The presumption is that there is a
technique that can be used to “inspire” “mobilize” “energize” and “direct”
players to work together for the sake of the team. Such
programs can indeed be of value in hierarchical work systems. But
what about law firms, investment banks, accounting firms, physician
practices, Boards of Directors, consulting firms, higher education and
research organizations? Do these
military-type models of leadership work? Dr.
Salacuse argues that leaders in professionals firms must “lead leaders” and
not “troops” or “employees” or “players.”
By leaders, he refers to people who have an independent power base
outside their organizational roles. That power base might be the
marketability of their own talents, their network of contacts, their stature
within their professions, their wealth, their ability to access
clients/funding sources. This
book asks how can a leader lead leaders? Dr.
Salacuse employs political metaphors rather than military or sports analogies
to make practical points. He reasons
that politics is the art of managing other leaders who have their own power
base and are not necessarily dependent on the leader. He
has a fascinating chapter on “the medium sends the message” and uses the
different managerial approaches of President George H.W. Bush versus
President George W. Bush to illustrate the concept. In organizing a coalition to go to war against In my
own experience with CEOs who get fired by their Boards of Directors, I often
find that these CEOs saw 1:1 conversations with Board members as side-track
issues that prevented them from managing their companies. They often did not find the time valuable
and it showed in their dealings with Board members. They preferred 1:1 chats
with the Chairperson combined with memos and reports to everyone else on the
Board. They felt that they could
inspire the group at Board meetings rather than to use the Board meeting to
ratify what had been worked out quietly in 1:1 conversations. Dr.
Salacuse has a fascinating chapter on how to make stars into a team. As a good negotiator he turns the topic
upside down and asks leaders to first look at the issue from the perspective
of the professions within the organization:
how much should I allow integration to happen and how much should I
allow this integration to damage my professional goals? This is the followers’mdilemma. And leaders of professional service firms
need to explicitly address making stars into teams by looking at the
followers’ dilemma first. There
are practical leadership suggestions for dealing with talented spoilers and
how to constantly remind people about their common organizational history. Laurence
J. Stybel, Ed.D. BOARDOPTIONS,
INC. Tel.
617 594 7627 |
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Thomas C. Schelling.
THE
STRATEGY OF CONFLICT. Boston:
Harvard Press, 1980 ISBN
0-674-84031-3 BOARD
OPTIONS/AMAZON PRICE: $21.95 |
The 2005 Nobel Prize for Economics was awarded to Robert
Aumann and Thomas C. Schelling.
Schelling is professor of Economics at the University of Maryland and
applied game theory to conflict. His
focus was on the weapons issues but his ideas have been applied to a host of
business issues. In this review, we will apply some
of Shelling’s concepts to how companies fire employees. Schelling says “uncertain
retaliation is more efficient than certain retaliation” when bargaining and
“the capability to retaliate is more useful than the ability to defend.” Now let’s get practical. GOODBYE
SCENARIO As a verb, “goodbye” is the act of
parting. It is also an
acknowledgement of parting. A goodbye
scenario assumes that once employees physically leave the building, they will
never be a factor for the company’s future.
The relationship was transactional and the transaction is now
over. If the firm defines the
termination as a goodbye scenario, the firm should be guided by a business
model that says, “What’s the least expensive way of terminating this
relationship?” And Board members
should ask tough questions about paying too much. AUWIEDERSEHEN
SCENARIO “Auwiedersehen” is German for
“Until we meet again.” It has a more
open-ended quality than the English “goodbye.” In an auwiedersehen scenario, the assumption is that once employees
physically leave the building, they may continue to be a factor in the firm’s
future. But it is unclear what that
factor may be. After their non-compete contracts are over, they may join
a smaller competitor and become potential allies or opponents in your firm’s
efforts to develop strategic alliances or acquire the firm. They may join firms that touch your industry and become
potential referral sources of new business for you or a potential source of
caution to others about using your company. They may attend alumni programs at their schools and
encourage/discourage graduates from joining your firm. Each
of these scenarios assumes capability of retaliation plus uncertainty of
retaliation. The best practical defense in terminating employees under
these conditions is “Treat people
with dignity on the way out because the assured costs of such positive
treatment are less than the potential downside retaliatory risks. AUWIEDERSEHEN VS IT’S
NICE TO BE NICE We work with companies that treat
departing leaders with dignity on
the grounds that “it is good public
relations and good for morale if we help former employees achieve a “soft landing.” This positive rationale works only in cultures supportive of
such a rationale. The Schelling rationale does not
depend on an organizion having a specific culture for treating people with
dignity. It develops a contingency approach
to management based on a risk assessment. There may be times when a “goodbye” scenario does indeed
make good sense. There are other
times when “auwiedersehen” makes better economic sense. In applying Professor Schelling’s theories, management’s
failure to take defensive measures with those possessing abilities and
options to retaliate is just bad economics.
One sees it at work every day. Maryanne Peabody and Laurence J. Stybel are
co-founders of Stybel Peabody Lincolnshire. Its mission is to assist
organizations in managing critical leadership transitions when the stakes are
high. Their website is www.stybelpeabody.com and www.boardoptions.com |
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Boston,
MA: Harvard Business School Press, 2003 ISBN
1-57851-993-4 REGULAR
PRICE: $29.95 AMAZON/BOARDOPTIONS
PRICE: $19.97 YOU
SAVE: 34% |
Donald Sull is Associate Professor of Management at
London Business School. Leadership
is about making commitments and seeing them through. There
are two dangers with commitment making.
The first danger is that the commitments fail. Sull argues that the second danger is that
the commitment succeeds. A series of
successful commitments can be bundled up in what Sull calls a company’s
success formula. In an every changing
world, leaders must guard against being prisoners of their own success
formulas. The
most interesting part of this book is his creative pairing of similar
companies in similar industries who took different paths of either honoring
or destroying their success formulas.
The stories of Firestone versus Goodyear in the tire industry have
extraordinary value for us today and are well worth reading. What
does this mean for those who serve on Boards of Directors? BOARDS WANT TO HIRE CHAMPIONS Boards want to hire champions.
Champions are bred to be decisive and self-confident. They love making
commitments and seeing them through. As Donald Sull argues, when champions make commitments you have
a double edge problem. It is
predictable that champions will have difficulty admitting that their
commitments no longer fit the times.
Indeed this trait is so predictable I called it the LBJ Effect in
honor of the American President who escalated commitment to a failing war
once it became clear that the war could not be won. LESSONS FOR REVIVAL OF THE FITTEST FOR BOARDS OF DIRECTORS. 1. Good CEOs are
champions. Champions believe in themselves and their commitments. 2. In the absence of a strong countervailing force, some CEO
Champions will rigidly hold on to what Sull calls the success formula when it
ought to be thrown away. We even take
the more extreme position that in the absence of a strong countervailing
force, champions will pour more resources into an inappropriate success
formula. 3. This strong
countervailing force is called the Board of Directors. SETTING THE RIGHT CULTURAL TONE At a cultural level, the LBJ Effect can be fought by the board
insisting on a culture where it is acceptable to fail, to learn from
mistakes, and to try again. It is a culture where "mid course
correction" is not necessarily a sin and "stick-to-itness" is not
necessarily a virtue. Perhaps the most famous example of a corporate culture that
supports this notion is Johnson & Johnson. On the desks of most
executives within the J&J organization is a framed one-page document
called, "Our Credo." The J&J Credo is a series of principles that govern
management decisions: When there was a concern that a batch of Tylenol had been
poisoned, a division manager unilaterally ordered all bottles of Tylenol off
the U.S. market. That action was taken without consulting corporate
headquarters. It was justified to management on the basis of the credo.
Senior management at J&J backed the local manager and the employees were
enormously proud of it. This use of a corporate values statement is not unique at
J&J. We have consulted at other companies with credos. And some of these
companies had problems as severe as the Tylenol crisis. But in no other
company would a middle level manager make a major decision based on an
esoteric company principle. With respect to failure, the J&J Credo
states: "Employees must feel free to make suggestions and
complaints....We must experiment with new ideas. Research must be carried on,
innovative programs developed, and mistakes paid for." In other words, failure is not "bad." It is part of
the necessary price for being innovative. Board
Influencing Tactics Boards seeking to influence CEOs to make mid-course corrections
have a semantic problem. Leaders must be convinced that mid-course
corrections will not be labeled as "indecisive" or
"waffling." Such negative
words are inconsistent with a positive sense of self. On the other hand,
adaptability in the face of changing circumstances is consistent with a
positive self-concept. Some CEOs deride Sarbanes Oxley as an
example of legislative overkill. They
say that it will move the board/CEO relationship into an adversarial
stance. Such a stance will only harm
shareholders and waste resources.
Sull’s perspective is powerful people are only too human. And they are all too human in predictable
ways. A valid checks and balances system should keeps the
LBJ Effect from getting out of hand and help companies decide when it is time
to destroy their own success formula before competition does it for
them. ### Maryanne Peabody and Laurence J. Stybel,Ed.D. are co-founders of
Board Options, Inc. Its mission is to increase Board effectiveness through
the application of practical behavioral Science. (www.boardoptions.com). |
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Jack Uldrich. SOLDIER, STATESMAN, PEACEMAKER: leadership lessons from George C. Marshall.
New York: AMACON, 2005 ISBN 0814408575
REGULAR PRICE: $24.95 BOARD OPTIONS/AMAZON PRICE: $16.47
YOU SAVE 34% |
This review was written by F. Gorham Brigham, Jr. Mr. Brigham served in General Marshall's Office from September 1940 until November 1945, the critical Word War II period.
I am an avid reader of books written about General Marshall. Mr. Uldrich did a remarkable job in bringing out the key incidents of this remarkable leader. What makes the book exciting are the examples. The author relates how Marshall's skills can relate to today's managers. Most of us like to believe we live in dynamic times and perhaps we do. Few of have been critical leaders in the most dynamic period in America's history. This book is well worth managers' time as General George C. Marshall continues to be a role model for leaders of today.
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LINKING MISSION TO MONEY: Finance for nonprofit board members. Allen J. Proctor Columbus, Ohio: The Academy for Leadership & Governance, 2004 ISBN 0-9706039-4-0 REGULAR PRICE: $16.00 ORDER FROM: www.thejeffersoncenter.org/alg Or Telephone: 614-228-7444 |
This small book is designed for non-financial types who serve on Boards of nonprofit companies. The author has impressive credentials to be providing such advice. He was Chief Financial Officer of Harvard University and Executive Director of the New York State Financial Control Board. This was the body that was brought in to oversee New York City when it went into receivership. He is a national figure in the area of nonprofit governance and taught at Harvard University as well as Columbia University. The book provides a balance between the conceptual and the practical while not drowning in numbers. That is an impressive accomplishment for a book about finance. At the conceptual level, the author says that core role of a nonprofit is to provide a sustainable set of services. And yet there is always the pressure to expand services: The dilemma of sustainability versus growth pervades the nonprofit world and you have to decide early on how your organization will deal with it. Is it better to provide a service and then suspend it when finances are tight? Or is it better not to provide the service at all? If you grow and later cannot sustain your service, you may jeopardize the survival of your organization. But expansion shouldn’t be a four-letter word. At the practical level, the book contains a number of financial forms that are useful for Board members, including a form for separating continuing expenses versus initiative expenses. There is also a cogent discussion about why the Board’s Treasurer should NOT be a financial expert. Many Boardoptions.com readers serve on Boards of both for
profit and nonprofit organizations. This is an excellent reference
book. |
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Norman Augustine
and Kenneth Adelman New York: Hyperion
Books, 1999 ISBN 0-7868-6601-2 AMAZON PRICE:
$12.95 |
Norman
Augustine was CEO of Martin Marietta, Chairman of Lockheed Martin Corporation
and served on the Boards of Procter & Gamble, Black & Decker, and
Phillips Petroleum. Kenneth Adelman is former ambassador to the U.N. and U.S.
Arms Control Director. These savvy and practical leaders use this small,
clever book for a discourse on the nature of leadership. The platform they
use is that keen observer of human nature—William Shakespeare. The use of The Bard
as a platform is clever at two levels. Many of us know Shakespeare’s
characters. But we only know them in the context of our own vision. Looking
at the same characters through two different and highly perceptive sets of
eyes is both educational and entertaining. For example, Claudius is now
perceived as an outstanding role model for leadership during times of crisis
rather than a supreme villain who kills his brother. Shylock presents the
example of someone who lets emotion get in the way of solid business judgment
and over-reaches. There is a second
level where the selection of Shakespeare as a platform is both clever and
useful. Most modern books
on management are often simplistic in content and often do not deal with the
complexities of human nature. Shakespeare’s characters, by contrast, are
complex, contradictory, and fascinating. Yes, Claudius is the very model of a
crisis management leader. He is a very sympathetic, guilt-ridden figure. And
he also is a murderer. In the play “Hamlet,” the public is said to adore the
hero. Hamlet punishes the guilty at the end of the play. To get to this
point, however, he also kills the innocent. And he kills them without
remorse. How many leaders do you know where there is a chasm between public
image and private conduct? The authors are not
content to focus on Shakespeare. At every turn, they show how their concepts
are illustrated by leaders of modern enterprises, large and small. Ken
Adelman now teaches Shakespeare on management in Washington, D.C. I wish I
could audit his course! Laurence J.
Stybel,Ed.D. |
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PAY WITHOUT PERFORMANCE: the unfulfilled promise of executive compensation. Lucian Bebchuk and Jesse Fried. Cambridge, MA: Harvard University Press, 2004 ISBN 0-674-01665-3 REGULAR PRICE: $24.95 AMAZON/BOARDOPTIONS PRICE: $16.47 YOU SAVE: 34% |
In his letter to Berkshire Hathaway investors in 2004, Warren Buffett wrote: In judging whether Corporate
America is serious about reforming itself, CEO pay remains the acid
test. To date, the results aren’t
encouraging. PAY WITHOUT PERFORMANCE expands on Buffett’s comments and provides a research base to support it. The authors also suggests what needs to be done to effectively deal with this “acid test” of corporate reform. Lucian Bebchuck is the William J. Friedman and Alicia Townsend Friedman Professor of Law, Economics, and Finance at the Harvard University School of Law. He is also a Research Associate of the National Bureau of Economic Research. Bebchuck has a doctorate in economics from Harvard and a law degree from Harvard. Jesse Fried is Professor of Law at the Boalt School of Law at the University of California at Berkeley. Prior to his academic career, he practiced tax law in Boston. Fried holds degrees in economics and law from Harvard University. The authors argue that Sarbanes Oxley reforms may have marginally improved the independence of Boards from CEOs. But Board members are still not dependent enough upon the shareholders they are supposed to represent. This dysfunctionality in the system makes it impossible for Compensation Committees to conduct true “arms length” compensation discussions with CEOs. The result is a CEO compensation system that tends to verbalize pay for performance without actually achieving it for CEOs. When CEO pay is uncoupled from performance, Board members seek to avoid having to pay “outrage costs” from the shareholders. One of the ways of avoiding paying “outrage costs” is to make it difficult for the average shareholder to truly understand the level of CEO compensation and how that level is unrelated to corporate performance. The authors call these techniques compensation “camouflage.” The authors are quite clear in describing examples and providing research to support their ideas. They propose remedies that focus on two themes: tying CEO compensation to real corporate performance and tying Boards to shareholders. With respect to tying CEO compensation to real corporate performance, they would seek to remove “windfall” and “rising tide” factors from CEO bonus/option payments. Windfall factors involve one-time rises in shareholder value. An example might include a sharp rise in stock value because the CEO makes a decision to downsize or receives a large payment from the successful settlement of a law-suit. Another windfall factor might be allowing accounting for revenue to move from one quarter to the next so that the stock will look like it is rising at a steeper angle. “Rising tide” factors would factor out increases in CEO compensation because an average company is benefiting from average industry growth that impacts all average players. These issues merit serious consideration from Compensation Committees. And Warren Buffet is correct in his assessment that most Boards have thus far failed the “acid test.” With respect to tying Boards to shareholders, the authors would terminate staggered Board elections. They would have the entire Board be up for election at the same time. I am reasonably sure that the authors’ remedy here would be worse than the disease they are seeking to cure. A Board of Directors is a work group that is supposed to be thoughtful and deliberative in nature. Their proposal would make the Board a far more responsive body at the expense of thoughtfulness. To make an analogy, the U.S. Senate is a more effective deliberative body because it is less subject to the passions of the moment. And it is less subject to the passions of the moment because only 33% of its members are up for election every two years. The U.S. House of Representative is far less effective as a deliberative body. And one of the reasons is that all members are accountable to the voters every two years. Regardless of whether you agree or disagree with their analysis, their key theme deserves consideration: if Boards allow CEO pay to be unrelated to corporate performance, it is important to define the problem correctly. The problem is not about greedy or lazy individuals. The problem is about a system that is not rewarding leaders for doing the right things. As Warren Buffet has said, fixing that system will be the “acid test” of the free enterprise system in the 21St Century. Larry Stybel |
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Paul P.
Brountas. BOARDROOM
EXCELLENCE: a common sense perspective on corporate governance. Boston:
Hale and Dorr, LLP, 2003 |
The law
firm of Hale and Dorr in Boston has published Paul Brountas' musings in board
service. A key theme in this book is
that corporate America needs to CREATE investor trust and not simply to
RESTORE it. The "Good Old
Days" were really not all that good from a governance point of
view. The past cannot be used as a
model for the future: "We
keep searching for solutions, standards, and rules that will restore ethics
and public trust and confidence in our corporations. But did that public trust and confidence
ever exist? Or was it merely a passive acceptance of a past system of
corporate governance that….was wholly unsuited?" Brountas
provides a commonsense perspective about Sarbanes-Oxley. It is indeed true that Congress cannot
legislate morality and ethics. But Sarbanes- Oxley creates a road map to
guide leaders who seek to create a climate of Board integrity that will be
expected of public companies operating in a Post-Enron world. Good governance is good for business, even
if the business is not subject to Sarbanes-Oxley. There
is an excellent discussion about the Duty of Care required of Board members
plus sample Board accountabilities that can easily be turned into a Board of
Director position description. In his
introduction to the book, attorney Jeff Rudman of Hale and Dorr says that Brountas takes his "40
years of advising officers and directors and distills it into 84 pages
without producing either a self help book or a paean to those who made a
bundle and lived to tell about it." BOARDROOM
EXCELLENCE is a useful review for experienced Board members who seek
perspective and an excellent introduction for new Board members who want a
basic overview from a thoughtful participant/observer. |
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THE TRUSTED LEADER: bringing out the best in your people and your company. Robert Galford and Anne Siebold Drapeau New York: The Free Press, 2002 ISBN 0-7432-3539-8 REGULAR PRICE: $25.00 BOARDOPTIONS/AMAZON PRICE: $17.50 YOU SAVE: 30% |
Robert Galford is managing partner at the Center for
Executive Development in Boston. Anne
Siebold Drapeau is Chief People Officer of Digitas and held management positions
with Pepsi, J.P. Morgan, and FTD. It
is hard to believe that they conceived of THE TRUSTED LEADER before Enron,
Worldcom, et al. But they did and we should be grateful. The authors state that “trust is intangible, but it is useful to think of it as an ‘outcome’ that results from very tangible processes.” This book provides some of the critical management tools to achieve that objective. For example, there is a Trusted Leader Self-Assessment in Chapter 2. Based on your scores, you can then read the rest of the book as a whole or focus first on those Chapters where you want to build your competence. What are the implications for Board members? One of the critical roles for Board members is the annual evaluation of CEO performance. Many of us grew up with a Management by Objectives philosophy: state the outcome measures clearly and then leave it up to subordinates to figure out how to achieve those objectives. In a world where institutional and individual investors/contributors have valid reasons to mis-trust leaders, the very concept of MBO needs to be changed. Boards must be concerned not only with what is accomplished but also how it is accomplished. Accomplishing objectives without breaking the law is a necessary but insufficient standard of CEO excellence. The Trusted Leader Self Assessment is a concrete tool which can be used by Boards to set quantifiable measures of performance for the critical intangible of trust. The vague concept of “trust” can thus be discussed in very specific ways. On page 95, the authors extol the virtues of Doug Baker, curator and sexton of a Church. He is described as a quietly, competent “fixer” rather than a charismatic leader who draws attention to himself. The authors state that we need more Doug Bakers leading our organizations. And to this we say, “Amen.” Maryanne Peabody Tel. 617 371 2990 |
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Jim Collins GOOD TO GREAT: why some companies make the leap and others don’t. New York: Harper Business, 2001 ISBN 0-06-662099-6 LIST PRICE: $27.50 BOARD OPTIONS/AMAZON PRICE: $19.25 YOU SAVE: 30% |
Twenty-one researchers looked for public companies with the following patters: Fortune 500 Companies with fifteen-year cumulative stock returns at or below the general stock market, a transition period followed by cumulative returns at least three times the general market over the next fifteen years. Eleven companies were identified and compared to similar companies within industry that had not transitioned from good to great. For example, Abbott was compared with Upjohn; Circuit City with Silo; Gillette with Warner-Lambert, Kroger with A&P, etc. The project involved coding 6,000 articles, 2,000 pages of interview transcripts, and 384Million bytes of computer data. What was learned? Since THE key role of the Board of the hiring and firing of the CEO, we will focus on this area only. But the book has lots of strategic implications for Board members and senior executives beyond CEO recruiting. Boards of public companies often assume that salvation can be achieved by hiring a well-known, charismatic CEO from outside the company. In a world of supply & demand, Boards ask shareholders to pay dearly for such rare talent. Are the results worth it? According to Collins and his team, such charismatic leaders are NEGATIVELY associated with good to great companies. Ten of the eleven good to great CEOs came from within the company. Good to great CEOs are self-effacing, even shy. They have a blend of personal humility combined with fierce determination for the organization as a whole. Boards of Directors are looking for Julius Caesar when they should be looking for Abraham Lincoln. The research-based nature of this effort takes the book out of the ordinary category of “pop” management books. It is a book to read, digest, and re-read. Larry Stybel & Maryanne Peabody |
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Jay W. Lorsch and Thomas J. Tierney. ALIGNING
THE STARS: how to succeed when professionals drive results. Boston:
Harvard Business School, Press, 2002. ISBN
1-57851-513-0 LIST
PRICE: $29.95 AMAZON/BOARDOPTIONS
PRICE: $20.97 YOU
SAVE 30% |
Jay Lorsch is the Louis Kirstein Professor at the Harvard University Graduate School of Business. Thomas J. Tierney is former Chief Executive Officer for Bain & Company. Lorsch and Tierney are a powerful duo for an examination of the world of Professional Service Firms (PSF). Eighteen highly successful U.S.-based PSFs were examined. They represented the fields of accounting advertising, retained search, investment banking, IT consulting, law, and management consulting. Firms surveyed included McKinsey, Bain, Skadden Arps, Wachtell Kipton, IBM Global Services, J.P. Morgan H&Q , Goldman Sachs, Young & Rubicam, Ogilvy & Mather, Ernst& Young, Price WaterhouseCoopers. The authors argue that when leaders exclaim, "people are our most important asset" they are being hackneyed and inaccurate. Within the business world outside PSFs, the honest statement would be "competent people are a necessary component of our success but even they are expendable." Critical differentiators exist apart from the individuals who created them: distribution channels, cost position, brand strength, location, technology, etc. In the PSF world, most people are also expendable. But there is a category of people that determine the future of PSFs: Stars. Stars build enduring client relationships and become role models for junior professionals. PSFs stars may be partners but not all partners are stars. Aligning stars with the PSF strategy is the foremost job of PSF leaders. This book deals with the complexities involved in creating such alignment. For those on Boards of Directors of PSF organizations, ALIGNING THE STARS helps to crisply focus on what are critical questions to be asked: who are the stars, what system is in place to insure continuity of stars, what system is in place to align individual star needs to strategy. Maryanne Peabody & Laurence J. Stybel |
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Morgan W. McCall, Jr. and George P. Hollenbeck Developing
Global Executives: The Lessons of International Experience Harvard Business School Press, 2002 Boston, Massachusetts ISBN 1-57851-336-7 List: $29.95 BOARDOPTIONS/AMAZON PRICE: $20.96 YOU SAVE: $8.99 (30%) |
Alexander (Sandy) von Stackelberg is a senior international marketing/sales executive whose career includes medical devices and other high tech equipment. Here is Sandy's reaction to the book: More and more firms are expanding their horizons beyond their own border and need competent managers to be successful. This book is perfect for those domestic individuals who must direct the companies that are expanding abroad without having much direct experience in the subject. Similarly, those who have had a more extensive international familiarity may find this book a bit too basic, however the various tables offered were of particular interest.
Properly the authors queried not just US expatriates say in France, but also Asians posted to Latin America, etc. The book defines what characteristics make up a "global executive" and contrasts those to their purely domestic counterpart. The individual's stories may be of interest to a few of the uninitiated; for they define some of the experiences that were most critical to mastering their profession. More important for the organization is how to identify potential Individuals and how to have the right "internal bias" to foster growth overseas. Further the authors define what the Organization's role should be and describe what the responsibilities are of the individual. All in all this is a worthwhile book on the subject. |
San Francisco: Jossey-Bass, 2001 ISBN: 0-7879-5620-1 PRICE: $31.95 |
Jay Conger, Ed Lawler, and David Feingold are professors who have written a review of corporate governance issues. This book best serves as an overview for new Board members. The topics cover the "usual" corporate governance issues: evaluation of the CEO, term limits, Board responsibilities, term limits, etc. etc. I have mixed reactions to this book. On the negative side, I think the authors put too much reliance in a survey conducted by Korn Ferry. As a result, the book has a dry tone, integrating survey results and academic papers. I think the authors spent too much time reviewing one survey and not enough time talking to Board members. The result is an academically skewed perspective. For example, in reading this book one would think that there is a keen debate among Board members today regarding which constituency or constituencies Board members are responsible to: shareholders versus employees versus society, etc. I think this is a debate academics WISH board members would have! Perhaps I am on the wrong Boards, but this is not an issue that is "hot" among my colleagues. Here is another example of how this book is skewed to towards an academic perspective: there is a very interesting section on the relationship between Board practices and company performance. The tables are hard to interpret and the entire section merits only three pages of a 206-page book. A McKinsey study called "Putting a value on Board Governance" is mentioned in the introduction but never discussed. On the positive side, each chapter concludes with a statement of Principles and concrete practices that can be established. On one hand, the authors discuss how valuable it is for Boards to get outside perspective through the use of external Board members and term limits. On the other hand, this team of authors lacked outside perspective. There is too much academics talking to other academics in this book. CORPORATE BOARDS would have been stronger had one of the three authors been a current or retired CEO. Larry Stybel STYBEL PEABODY Sixty State Street, S. 700 Boston, MA 02109 Email: lstybel@stybelpeabody.com |
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E-BOARD STRATEGIES: How to survive and win By Ram Charan and Roger Kenny New York: Boardroom Consultants, 2000 ISBN 0-615-11524-1 BOARDOPTIONS/AMAZON PRICE: $27.95 |
Roger Kenny is managing partner of Boardroom Consultants and Ram Charan is a consultant and professor at Northwestern University Kellogg School of Business. The heart of this slender volume is a mention of a study done by the venture capital firm, Onset Ventures. Nearly 80% of startups fail to survive the first 18 months of life. Onset surveyed 360 startups and found that one group had a 70% chance of making it. This group of companies had CEOs who used mentors with experience running both startups and large businesses. Such mentors can often be developed and effectively employed in a Board of Directors/Board of Advisors capacity. Effective Boards in startups involve partnership between Board members |