Who’s Next?

From a discussion on leadership succession:

I disagree with the comment that planning immediately for the next successor is a dangerous strategy. First, if it is the stated policy of an organization to manage its succession policy this way then there is no undermining message to be received. The decision to prepare for the next change is simply a matter of course. Second, CEO longevity is not guaranteed. Being prepared for an unexpected departure is simple common sense. We back up our hard drives and our files regularly and assign backups for job responsibilities not because we do not trust our hardware, our software or our staff but because accidents happen, people get sick and power surges are beyond our control. Surely it is better to be prepared than caught off guard.

Another area of concern in leadership succession is the matter of organizational culture. As businesses become less traditional in structure, environment and personality companies like Google and Apple must also consider how well a new CEO fits into the unique culture that is an integral part of both their public image and their financial success. In organizations such as these it is even more important for the current CEO to be involved in the selection and mentoring of future leaders in order to ensure that the values that drive the organization are effectively passed along.


Business Ethics in the ’10’s

The following two comments are from a blog on an optimistic view of the future of business. I’m kind of proud of the first one and cringe at one of my sentences in the second:

Thank you, Gill, for another thought-provoking essay. I have enjoyed reading your blog over the past few months, in particular the way that you continually remind that we cannot separate business from human-ness.

Your blog has stirred up something I have been thinking about for the past couple of days that I will try to sum up briefly. I read an article by George Will recently that he wrote in April, condemning the American Public for their love of jeans. At one point in the article he states with displeasure that “Jeans come prewashed and acid-treated to make them look like what they are not — authentic work clothes for horny-handed sons of toil and the soil.”

That statement got me thinking. I used to work construction and in that world there are two very distinct classes of people: those that wear jeans and those that don’t. I realize that “the working man” is an oft-glamourized archetype and that there is nothing romantic about a group generally given to drawing dirty pictures in Sharpie on a Port-o-let wall. However, I do know that when I was laboring every day and earning my money by the sweat of my brow, I didn’t have time to think about how I could leverage the pension fund. The guys that were good at their jobs and had proven by experience that they were experts in their field made the most money. If we were lackadaisical in our work, people could be seriously injured as a result, so we were careful and accountable for the effect our labor had on others. If we didn’t perform to customer’s expectations, we didn’t get paid until we had fixed it at our own expense.

I now work a desk job in the quotations department of a manufacturer. We have a very relaxed company culture and so jeans and t-shirts are the norm from the CEO on down. I’m glad that I still wear my jeans and work boots and pocket knife because they remind me that I am at work. I try to remind myself that just because the physical part of my job is much, much easier, I owe it to my employer and to my customers to work hard at what I do. My jeans remind me that promotions are best earned by achieving excellence and know-how not by politicking. My sweatshirt, full of holes from wearing it while welding, reminds me that if I have to stay late to fix a mistake, that is part of the job and I need to do it to earn my pay.

It is easy in the business world of suits and khakis to forget that work is not meant to be easy and that rewards (and bonuses) are meant to be earned, not expected. I think that the only way to re-establish credibility is for business leaders to actively go against the culture of greed and privilege that has gotten us to this miserable state. They need to hold other leaders accountable, publicly, to higher standards of ethics and to decry ridiculous and exploitative practices like handing millions of dollars to CEO’s who drive their businesses into the ground at the expense of others. They need to remind themselves and their management staff that get-rich-quick schemes are just as much a sham for big business as they are for any consumer. Lastly, they need to emphasize proven excellence and character in their promotion and hiring practices, rewarding those employees that display those attributes ahead of “shooting stars” who talk a good game but don’t really know what they are doing.

Put simply, in whatever industry or position we hold we need to “put our jeans on” and remember that diligence and hard work are virtues to be embraced not troublesome efforts to be avoided as often as possible and that a dollar quickly made is often twice as quickly lost.


@SKEPTIC – In defense of Pollyanna, she certainly was a happy girl, wasn’t she? To paraphrase C. S. Lewis in The Silver Chair, “Suppose we have only dreamed, or made up, all those things…Then all I can say is that, in that case, the made-up things seem a good deal more important than the real ones. Suppose this black pit of a kingdom of your is the only world. Well, it strikes me as a pretty poor one…That’s why I’m going to stand by the play world…we’re leaving your court at once and setting out in the dark to spend our lives looking for [the play world]. Not that our lives will be very long, I should think; but that’s small loss if the world’s as dull a place as you say.”

There is no guarantee that believing in and striving towards a brighter future will make it so. However, waiting for something better to arrive before believing in its existence guarantees a long wait. I would rather speak of the world as it could be in hope that it will become what I envision than to allow cynicism or despair to keep me silent.

@FRANCIS DE CRUZ – While I agree wholeheartedly with your sentiments, I am afraid that most stakeholders (specifically shareholders) would say that the thing they want most from a CEO is a high return on their investment. Part of what has set the stage for the recent economic crisis is the heavy participation in the real estate market and the stock market by laymen investors trying to make a quick buck. While banks and investing houses are certainly culpable for their part in underwriting bad loans and other shady dealings, we cannot completely hold ourselves guilt-free. If John and Jane Smith had not decided they were ready to be real estate moguls with no capital to invest and no training, they would not have no loan on which to default.

On Wall Street, the “consumerization” of the stock market via online trading services did wonders for stock values as more and more people became participants in the system. Unfortunately, many of these new investors are people who play the market like a slot machine with money they cannot afford to lose. The result is two-fold: an increase in market fluctuations (as more people participate for the sake of short-term gain) and an increase in emotional response to market fluctuations (since more people have more to lose when prices go down).

I believe that both of these trends are responses to effective marketing campaigns in the form of commercials, TV shows and infomercials that take advantage of our get-rich-without-hard-work culture. Investing gurus tell us that we can make thousands of extra dollars from the comfort of our own homes with no money down, wow! Rather than fault The Media, I say that those of us who believe that honest hard work will result in greater dividends in the long run need to be more vocal and more visible in order to change the culture. I wish I had great ideas as to how this can be done, but I believe that we need to use The Media to create a counter-cultural movement towards the future that we wish to see.

Executive Greed

From a Forbes.com article on Executive Optimism: (Credit to Gregg Easterbrook, among others, who introduced this idea to me)

Equally perilous will be Executive greed. One very simple way that CEO’s could manage expectations, keep their jobs and make a positive impact to their company’s bottom line is to make their salaries and bonuses directly proportional to the least-paid staff member in their organization. In this way they will benefit only when everyone in the organization feels the effects of positive change in the economy. When CEO’s who fail miserably are rewarded with multiple millions of dollars in bonuses and retention fees it should be no surprise that shareholders and workers are going to expect to see some tangible reward as well.