Wednesday, January 31, 2007

Should we curb high salaries? If so, how?

Very high salaries for top executives is harmful to so much. It is said that companies have to pay so much to get managers to take the job. This is nonsense. Furthermore, the huge gaps between the top and the lowest paid disturbs society. It seems to be unfair to all. The answer is transparency. If the light of day is shone on every aspect of CEO compensation, it will encourage greater consideration.

I am somewhat surprised that the press has not picked out very highly paid executives and staked them out to photograph their houses, their cars, their planes, and their spending. At some point, I am convinced it will happen, and that will be harmful to society.

Tuesday, January 30, 2007

Resigning when a subordinate is guilty

In many culture, the ultimate boss is expected to resign when a subordinate commits a crime or is simply guilty of unethical behavior. An honest mistake is OK, but when it is an intentional breach or law or trust, the boss goes of his or her own volition. In Japan, until recently, the boss paid with his life! While few cultures go that far, resigning is the honorable way to go.

However, we see many examples of a boss proclaiming his or her responsibility, but then continue as though nothing had happened. This is a sad cultural reflection.

Sunday, January 28, 2007

Age discrimination in hiring is alive and well

It is interesting that while the average life expectancy has gone up over 20 years since Social Security started, average retirement age has not. In fact, we can see that a company seeking a 45 year old in 1950 was looking for someone two thirds of the way through his or her life, that now translates to someone close to the midpoint. Yet, while pundits keep on proclaiming that America will have to find new ways to make better use of people in their 60s, companies persist in excluding them from opportunities.

The average age of the Iraq Study Group was 74, yet, most position specs will talk abut seeking people with 10-15 years experience (or 35-40 in the case of an executive). I have never seen a spec which calls for 30 years experience (a 55 year old), and would collapse if I saw one for someone with 40 years experience. Yet, why not? If today's 65 year old is like a 50 year old of a generation ago, companies should be eager to hire energetic, smart and very seasoned executives.

Cable to Cars - incomplete numbers

We seem to have such a drive towards simplification of everything that we expect one fact or number to encapsulate all we need to know. Whether it is an SAT score, a bhp number in a car, or download speed in a broadband connection, they only tell us part of the story. BHP tells us little without torque, and even then, we need to know the respective curves. Download speed needs to be complemented by upload speed, error rates, etc. An SAT score may be a misleading predictor of success in later life.

This habit leads people to not only seek, but to assume that everything can be measured by one number. Perhaps this is why the US News & World Reports ranking of Colleges and Universities, although criticized, is relied upon by many.

Saturday, January 27, 2007

complete cast lists

I have always found it interesting that in the US it is difficult to get the complete cast list for a TV program, whereas in other countries it is normal to show it. I can understand that it eats into TV commercial time, but even on websites, it is difficult to get one. I can speculate that in other countries minutiae may be more important, or that in the US viewers do not want to be reminded that drama shows are fantasy. However, I really do not understand it.

Looking at the world through tinted lenses does not help

The US has long officially believed that Cubans were only waiting for Fidel Castro's grip on power to loosen to replace him. Yet, even though it has, nothing has changed. The US Government assumed that Iraqis would welcome US troops as liberators. However, they did not, or if any did, it was not for long. Sadly, US officialdom and corporate management have for years continued to believe that all other countries see the US the same way Americans do. This has not served America well. Empathy for others is underdeveloped.

Many Americans believe that Americans are somehow more patriotic and love their country more than citizens of other countries. Yet, citizens of countries with even the most odious regimes do love their countries. This patriotism allows them to put up with a lot.

Nevertheless, ordinary citizens of other countries do have affection and respect for much in the US - it is simply not always what Americans expect. Citizens of other nations respect America's creativity, energy, economic freedom, as well as Hollywood movies, Levis and Coca Cola. However, they may not always admire the politicians, economists, and philosophers whom we do.

Many citizens of other democracies believe that the US' "first past the post" electoral system, and constant partisan gerrymandering of boundaries is far from democratic. Some other countries have charters of rights which are more modern than the US, which has one of the oldest constitutions in the world. Whether you agree with it or not, it is important to know it.

Friday, January 26, 2007

The US loses by discouraging citizens from living overseas

One in ten United Kingdom citizens live outside Britain. The number continues to grow. Yet only about one in seventy-five Americans live overseas. There are many reasons for that - size of the country, large tax disincentives (the US is one of very few countries which taxes non-resident citizens) - but the largest may simply be lack of knowledge of the world outside. In turn, this leads to a country with very little understanding of other countries and empathy for citizens of other countries. As a result, the US is at a disadvantage when creating and managing foreign policy, or growing international businesses.

It would benefit the US immensely if there were a large pool of US citizens who have experienced other countries, languages and cultures through immersion rather than simply visits, however lengthy.

Thursday, January 25, 2007

TV shows us that Bullies always win

Every day we see on TV that bullies are in charge and that they always win. Whether it is Donald Trump, Dr. Phil, Simon Cowell, or Judge Judy, the role models we see are bullies. Even in the business press, we see that so many of the role models are described as loud, bombastic and egotistical. This means that people are asked to respect and emulate individuals who are by no standards effective managers or leaders.

Wednesday, January 24, 2007

Superstar CEOs in a collaborative age

We talk a lot about teams and collaboration. Yet, whether we see CEOs, Chefs, College Presidents, Orchestra conductors, or Sport Team Coaches, we see the pay gap between the star and the rest of the team constantly growing. This was not always the case. I wonder how much of this is actually an abdication on our own responsibility. If we can hold the leader responsible for success or failure then we cannot fail. As John Holt realized in his studies of children, if we do not try then we cannot be held responsible for our inevitable failure. If we try and take responsibility, then if we fail, we can be blamed. Perhaps if the leader takes a greater share of the money, he or she absolves us from responsibility for failure - except it seems that they are even faster to dump their subordinates.

Tuesday, January 23, 2007

Ethics continue to be an issue in business

While we make much of how much we have learned from the ENRON, Worldcom, and many other situations, I continue to be stunned that unless precisely the same situation arise, there is an ethical blind spot in the minds of many business leaders.

For example, the Association of Executive Search Consultants recently recommended a firm to help people find jobs. This is so counter to the normal ethics of executive search, that I found it stunning. It represents a major conflict, and furthermore, most of these firms exploit desperate and frightened executives by over-promising and under-delivering.

As Chairman of the Marketing Executives Networking Group, I see this dynamic a lot. Ethics are in short supply so often.

Monday, January 22, 2007

Who should suffer from a CEO's mistakes?

Today Pfizer announced that 10,000 people would be laid off. Motorola announced that it would lay off 3,500. However, I have still to see an announcement that because a CEO allowed the hiring of 10,000 more people than was needed, who now have to be fired, the CEO will be joining them in the unemployment lines. Not only are the rewards often out of proportion to the effort, but so are the penalties.

Sunday, January 21, 2007

CEO of Mesa Air - shows that bad CEOs can be lauded in the press

Jonathan Ornstein, CEO of Mesa Air, was recently the subject of an article in the New York Times. It said that he is in a bad mood around 60% of the time - and he does not hesitate to take it out on his subordinates! So what kind of person would work for him - probably people who lack self-respect.

“He’s loud, volatile, insulting, doesn’t listen to the other perspective.” -- Scott Kirby, President, US Airways.

Do we need CEOs like that?

Saturday, January 20, 2007

Optimism while being aware of issues

Today we face many issues which are serious and seem intractible:
  • Global Warming threatens our quality of life and perhaps life itself.
  • Continued and growing use of oil in the US hurts the US and finances its enemies.
  • The Iraq war seems to be a quagmire with no easy solution.
  • Islamic fundamentalism and other extremism is a threat to freedom.
  • Religion continues to divide many in the US.
  • Race is an ongoing issue. Not just black and white, but between other groups too - Hispanic and Asian.
  • Wars and genocide across the globe do not seem to diminish. Even though fatalities in Iraq seem to be much lower than in Vietnam, much of this is due to improved medicine so that injured soldieers who once would have died, survive.
  • Globally democracy is not making gains, and over the past few years has even retreated.
  • The US Balance of payments stubbornly refuses to go down in spite of a declining $.
  • The US Budget deficit is growing.
  • 45 Million Americans are uninsured, even though the US spends twice as much per capita on health care as any other country in the world while getting poorer health care than many other Western countries. It hurtd global competitiveness.
  • Income inequality in the US is increasing.
  • Education in the US is failing - local funding and control hurts schools while Universities and Colleges are performing poorly although costs continue to climb faster than inflation.
  • Illegal immigration is an issue in every Western democracy.
However, morale is high and continues to be so. We sometimes forget that while the above are true, we have the means to fix each of them. We have amazing technology, a greater knowledge of the world and great energy from the population, including most of the immigrants. I certainly believe that we can achieve much.

Friday, January 19, 2007

Is Marketing attracting Tacticians rather than Strategists?

There are far fewer CEO now who came up the Marketing ranks than in the 1960s and 70s. More started in Finance. Perhaps it is because of the information explosion, but more Marketing functions seem to revolve around details of execution that issues of strategy. during the 60s and 70s, even relatively junior marketers were expected to be involved in, and contribute to strategy. This is less so. Therefore, when someone becomes a Chief Marketing Officer, they have not had the preparation which enables them to step into a Strategic role. I have spoken at the Wharton Alumni/Gunderson CMO Bootcamp, and found the response to strategic issues to be bewilderment. As long as this is the case, business will continue to be anything but market driven.

Thursday, January 18, 2007

The financial experts at Barclays have no clue about brand equity

Today Barclays Bank announced that it would be paying $300 Million for naming rights to the new Nets stadium in Brooklyn. Barclays is the bank whose exchange-traded funds business is widely regarded as a standard setter. In the Wall Street Journal today, Robert E. Diamond, Barclays's president, said the deal with the Nets will improve the brand recognition of Barclays's retail and investment-banking offerings. "We knew it was time to invest more in our brand," he said in an interview Thursday. "I don't buy the fact that branding is only for retail products."

Wow! They may be some of the smartest financial people in the world, but do not understand that staium is extremely inefficient for brand equity building. I have been involved in this twice. Once, I succeeded in preventing the purchase of rights in Boston, and then I failed to stop the naming of Reliant stadium in Houston. It is almost always an ego-trip on the part of the CEO. It is inefficient in targetting the market, and the positioning it communicates is rarely appropriate unless you are in the sports business.

Wednesday, January 17, 2007

Is the New York Times building the brand it wants to?

The New York Times is one of the few newspapers in the country which makes it very difficult to provide feedback directly to the writer of an article. Papers such as the Wall Street Journal, Washington Post, L.A. Times and many others encourage this. There are times a reader simply wants to say "well done," correct or add to a fact. I have seen errors in New York Times articles, but other than a letter to the editor, there is no way to email the journalist. I wonder if the New York Times fully appreciates the implications of this on its brand equity.

Monday, January 15, 2007

Building a personal brand is hard

We are told so much about the need to build a personal brand. However, it is not easy to build brand awareness and even more difficult to shape your positioning.

Friday, January 12, 2007

So the new AT&T is dumping Cingular!

AT&T, which is not really the old AT&T, but the old Southwestern Bell, itself a spin-off from the original AT&T, is going to drop Cingular, which itself incorporates the old AT&T wireless. How confusing! But does it make sense?

Other than the fact that well over $1 Billion has been spent building Cingular as a well-known and differentiated brand, does it make sense to go back to a brand whihc represented "Ma Bell," reliable, but resistant to change? Many argue that AT&T is a name which only means something to older people, whereas Cingular means much more to younger people. Cingular's "raising the bar," tagline is also going to go, as its its distinctive orange logo. I understand that much consumer resesrch has been done to verify that this makes sense. I would be fascinated to see that research.

I wonder if any of the research was used to calculate brand values and to perform a financial payout calculation. If so, it would be unusual. Few companies ever measure their brands on a $ basis. This is a missed opportunity.

Thursday, January 11, 2007

Does "iPhone" belong to Apple? Does it matter? You bet!

Cisco has announced that it will sue Apple for use of the iPhone name, that Cisco owns, was registered in 2000, and used since 2006. Now legally there seems no doubt that Cisco owns the name, but in the consumer's mind, Apple has for a while. So Cisco becomes the "bad guy" in the minds of many consumers, and Apple gets invaluable publicity whatever the outcome. In the end, even if Cisco gets financial compensation, the loss in value of the Cisco brand name will be much greater - the company which took on a "cult brand!"

Wednesday, January 10, 2007

"Experts," shooting from the hip

Any newspaper article, or TV story, would not be complete without the obligatory quotes from "experts." All too often, we have not heard of these experts before, and we have no idea about their credentials to be experts. Usually, they are people who are shooting from the hip for a chance at personal publicity. We should take their advice with some scepticism. Today the papers are full of stories about the new Apple iPhone, with experts being quoted to "prove" it will be successful or a failure. It is clear that many of the quotes are based on little thought or evidence. Instant analysis is demanded by the media to feed their publications, and there are always people who are eager to provide it.

Tuesday, January 09, 2007

If, as the Tao says, the best leaders are unknown those they lead, how can we find and judge leaders?

According to the Tao, the greatest leaders are unknown to their subjects. When a leader organises matters in harmony with the Tao, the subjects go about their work and believe that their projects are accomplished entirely through their own efforts. Therefore everyone is content.

Next best are leaders that are loved and praised,
then those that are feared.
The worst are hated and despised.

A.G. Laffley of Procter & Gamble may be one of the rare examples of a great leader. He does not thrust himself to the forefront. Colleagues and subordinates have said repeatedly that they do not know how he does it, but he always gets good results. I believe that had he left P&G and left his career to the power of self-promotion, he would not have been so successful. However, he spent his career in a company which carefully and accurately measures results. Most of the "great" leaders promoted by the business press are at best those in the 2nd category. People who are great leaders are likely to go unrecognized and unrewarded.

Sunday, January 07, 2007

How can we trust people who will tell us what they think we want to hear?

Many people fear upsetting others, or perhaps fear their anger. It does not matter which. If you have a peer, a subordinate, or someone important in your personal life who does this, watch out. People like these will get you into trouble. Eventually, they will withold some key information from you because you will be upset by it. Then you will make a wrong decision, and you will be hurt far more. Expect everyone around you to tell you the truth, and make sure you do not punish them for telling you what they believe to be true, even if it turns out to be wrong. You need to hear it.

Also, be one of the people who is open and honest with those around you. Do not allow someone to make a poor decision because of lack of information.

Saturday, January 06, 2007

Cultural differences we do not see

Ethnocentricism blinds us to differences. It is to some extent obvious that Americans are different from Chinese or Indians, though we often fail to see them accurately, or the similarities. However, we are particularly poor at recognizing differences between nations and cultures with much in common. For example, while the majority of people in the US believe in God and practise a religion (usually Chirstianity), in the UK, a Guardian poll a month ago showed that 82% believe that religion does more harm than good, and 63% describe themselves as not religious. This has a huge impact on many of the activities of daily life. So much in politics, education and business reflects implicit beliefs, that a culturally different underpinning will change how people live.

Friday, January 05, 2007

Some companies are completely clueless

I have written before about how people do not know what they do not know. One interesting example is Indymac Bank's expansion of retail banking. In a market which is becoming eincreasingly competitive, they have decided to expand their retail banking presence. However, in a classic expression of "build it and they will come," the new branches are undifferentiated and all but invisible. They have failed to learn from the existing leaders in the marketplace and do not seem to even know how weak their "stores" are.

Thursday, January 04, 2007

Conflict avoidance is not conflict resolution

If there is a disagreement, it does not go away if you simply do not address it. Often, taking the bull by the horms results in a solution and agreement which is far easier than you imagine. Avoiding it is likely to make it worse.