Yesterday was Bosses Day and in honor of that I’m going to share some information on bosses—BIG bosses.
These days’ people are incensed with executive pay packages on and off Wall Street.
For years there has been much talk about pay for performance, but I haven’t seen any strong connection—have you?
And certainly not this year.
But the recession doesn’t seem to have slowed down CEO compensation at all and I’m not even referring to Wall Street.
You’ve probably never even heard of the 5 most highly compensated CEOs, unless you are unfortunate enough to own the stock or work or been laid off from the companies. The 5 are Eugene Isenberg, chief of Nabors Industries, Michael Jeffries of Abercrombie & Fitch, Brian Roberts of Comcast, John Faraci of International Paper and James Stewart of BJ Services. Ugh.
By now you all know that those poor mistreated boys and girls at what used to be Merrill Lynch are getting their bonuses, perhaps if they get over their embarrassment they will start spending and give the economy a real boost.
And then there’s Ken Lewis, the beloved CEO of B of A—the bank we love to hate.
You probably read that Kenny is “stepping down” and has agreed (under duress) to forego his 2009 salary and bonus and repay a whole million dollars. In case you were actually impressed with this, please note that he will walk away with a $53 million pension plan.
That’s on top of everything he’s made (I refuse to say earned) previously.
The NY Times had an interesting article that explains that Lewis isn’t incompetent, he just can’t lead. But from where I sit by the time anyone makes it to the corner office of a corporation the size of Bank of America should be able to do it all.
Yesterday I shared quotes from Amazon.com CEO Jeff Bezos that focused on entrepreneurial topics, especially stock and its price.
Today, we’re going to look at Bezos’ vision for Amazon marketing.
Let’s start with what you thought of the last Amazon ad you saw. You’re probably scratching your head and thinking that it wasn’t very good, since you don’t remember it.
There’s nothing wrong with your memory or the ad, for that matter, because there was no ad.
“Instead of shelling out big bucks for lavish trade shows and TV and magazine ads, Amazon pours money into technology for its Web site, distribution capability, and good deals on shipping. … “It is pretty unprecedented that their brand has ascended so quickly without a large marketing budget,” says Hayes Roth, chief marketing officer at brand consultant Landor Associates. “It’s not about splaying their logo everywhere. They are all about ease of use.”
Amazon has done well in the recession for the very reasons that Wall Street lambasted them after the dot com bubble burst.
Wall Street wanted short-term profits, while Bezos focused on the long-term.
When I was looking for yesterday’s quotes, I also found these two and they say it all.
“If you do build a great experience, customers tell each other about that. Word of mouth is very powerful.”
There are two kinds of companies, those that work to try to charge more and those that work to charge less. We will be the second.”
It takes enormous strength of character to stay focused on the future when investors are pounding on you to focus on immediate returns.
Too many CEOs sell their company’s future by focusing on keeping investors, analysts and the media happy in the short-term.
I want to share three comments from Jeff Bezos today, because tomorrow’s post is about him.
They all focus on the financial side and point up the great difference between Bezos and many other CEOs when it comes to money and stock.
If Bezos is anything he is pragmatic and real—no BS. And that is just as true when he is talking about entrepreneurial topics as about his business.
The truth in this comment has only increased over the years and will continue into the future. “Good ideas will always get funded, so that’s not going to be a problem. But you will see that it will be harder and harder for bad ideas to get funded.”
“It’s part of the territory with Internet stocks, that kind of volatility. It can be up 30 percent one month, it can be down 30 percent in a month, and a minute spent thinking about the short-term stock price is a minute wasted.” Obviously, Bezos never wasted any minutes on the subject.
If you’ve followed Amazon at all, you know that every time Bezos invested in better technology or added product lines Wall Street predicted its imminent demise. Even today, after a decade of success, the analysts question Amazon’s every move.
Bezos takes it in stride, still focusing on the long term and customer satisfaction, as he has all along.
“No. I’ve taken plenty of criticism, but it’s always been about our stock price and never about our customer experience. After the bubble burst, I would sit down with our harshest critics, and at the end of the meeting they would say, “I’m a huge customer.” You know that when your harshest critics are among your best customers, you can’t be doing that badly.”
Join me tomorrow for a look at Bezos’ approach to nonmarkteing.
Southwest Airlines, like Zappos, has a corporate culture that is head and shoulders above most and is the envy of their competitors.
Southwest’s culture is so important that the company walked away from a deal to buy Frontier Air Lines.
It is that culture has helped Southwest weather the current financial storm and it zealously guards that culture because it knows it is the true foundation of its strength..
As Gary C. Kelly, Chairman, President and CEO, said in the during the Q2 Earnings Call,
“Excluding special items, we reported a second quarter profit of $59 million and that was $0.08 a share. And I would say given the deep recession that that is a very solid performance and, of course, I’m very proud of our people on every front. We continue to manage through the economic crisis with a lot of change and all the while our folks are delivering a very high-quality operation and outstanding customer service, so I’m very, very proud of them.”
The call was primarily with analysts, although many investors probably joined it, and the introduction included the following statement,
“This call will also include references to non-GAAP results; therefore, please see our earnings press release in the Investor Relations section of our website at Southwest.com for further information regarding our forward-looking statements and for a reconciliation of our non-GAAP results to our GAAP results.”
So if you’re Southwest and known for a fun culture, how do you incorporate that into something as eye-glazing as explaining GAAP, AKA Generally Accepted Accounting Principles, at your annual meeting?
Easily. You just ask David Holmes, known as the Rapping Flight Attendant, to explain it.
Remember the old line “those who can, do; those who can’t, teach; those who can’t teach, teach teachers.”
It’s not true. Most people who go into teaching do it because they have a true passion—at least when they start.
But passion is hard to sustain when all you hear is that
you are too easy/hard;
you give too much/not enough homework;
you too often receive little-to-no respect from parents, kids, administrators and even your colleagues;
more time is spent on politics than lesson plans;
you spend more time teaching basic manners than educating; and
your de facto hourly pay rate is around minimum wage in spite of a 9 month work year.
Some manage it and they are the ones who truly leave their mark.
Most of us remember the teacher(s) who really touched us, who opened our eyes and helped us see the world differently.
And we remember the worst we had, but the majority fall in-between and become a blur.
some of the best come to teaching from other successful careers.
One of the highest profile of these is Tom Bloch, who left H&R Block (the family business founded by his father) after 18 years, five as President, and a salary of nearly a million a year to teach math at an inner-city middle school in Kansas City, because he wanted to make a difference—and he has.
Listen to this interview and then read his story in Stand for the Best. Share it; maybe it will inspire others to apply their passion to teaching, but if nothing else, perhaps it will encourage them reconsider their own attitude towards teachers.
Much will be done today to commemorate the lives lost on September 11, 2001. The story I’m going to share has a different focus than most and one I believe is worth your time.
Among those who died that day was the husband of a woman I knew casually and because our acquaintance was casual I was surprised when she called nearly six months later.
I’ll call her “Kerry” and we talked for hours, but the kernel I want to share is this.
She needed support to move; not just move on, it was too early for that, but to physically move.
Kerry said the reaction to “Craig’s” death changed when people found out he died in the attack. It changed from sympathy or empathy to an almost macabre interest in how she felt because he died “that way.”
Many seemed to feel that her politics should change (she is ‘liberal moderate’, her words) and that the event should be the main focus not only in her life, but also for her two young daughters and she didn’t want that.
Kerry said she called me because she remembered my saying that I found it sad that John Kennedy Jr.’s life seemed to be defined by his father’s death; that he never was able to become anyone other than the little boy who saluted at the funeral.
Kerry said that she didn’t want her kids to be forever known as “Kristy/Jenny-her-father-was-killed-in-the-September-11-attacks”
The problem was that many of her family and friends were horrified at how she felt. They acted as if losing Craig September 11 made his death a national symbol, not a personal tragedy.
We talked many times over the next few months and the upshot was that Kerry did move far away where no one knew them. When Craig’s death came up in conversation Kerry just said that her husband had died; she said when her daughters were mature enough she would tell them what happened, but not until they had the opportunity for a normal life—not one filled with other people’s baggage.
I think for Kerry I was “the stranger on the plane,” the uninvolved person to whom you can say anything because you will never see or hear from them again and I was honored to play that part.
The death of a parent is always tragic. I know; I was five when the driver of the car in which my father was traveling fell asleep at the wheel and drove off a mountain road.
The point I want to make today is that we don’t forget, but we do move on and as we move we grow and change.
No matter how horrendous the event we all have the ability to choose what defines us and what memories rule our lives.
Never allow others to force you into a role that fits their view of what should define you.
Whether you laud Ted Kennedy or despise him you can’t deny that there are things he said that resonate with any person, in any country and any circumstances.
Here are some of my favorites.
“I recognize my own shortcomings — the faults in the conduct of my private life. I realize that I alone am responsible for them, and I am the one who must confront them. I believe that each of us as individuals must not only struggle to make a better world, but to make ourselves better, too.”
“There is no safety in hiding.”
“Yes, we are all Americans. This is what we do. We reach the moon. We scale the heights. I know it. I’ve seen it. I’ve lived it. And we can do it again.”
“I have seen throughout my life how we as a people can rise to a challenge, embrace change and renew our destiny.”
“The work goes on, the cause endures, the hope still lives and the dreams shall never die.”
“We have learned that it is important to take issues seriously, but never to take ourselves too seriously.”
The second one is an article you’ll probably be hearing a lot about. No matter what you think of the content, the question is whether John Mackey, CEO of Whole Foods, should have stepped into the political wasp nest of healthcare. After youread the article, be sure to click the comment tab at the top and scan through some of them. Interesting reading.
Today I have the pleasure of interviewing M3’s founder KG Charles-Harris.
Why did you start M3? I started the M3 Foundation when I became aware of the plight of black boys in school. In the San Francisco Bay Area, 73 percent of black boys drop out of school (nationally the average is 54%). These statistics places one of the wealthiest areas of the world on par with war torn areas like the Congo or very impoverished nations like Laos. The statistics, along with meeting some of these kids, shocked me into action.
Another issue was that I wanted my own children to receive a good public school education.
To ensure that this happened, it was necessary to put a structure in place that enabled teachers to do what they were supposed to, i.e. teach students who were performing at or above grade level.
Sadly, most teachers and schools are unable to do this because of the significant portion of students lagging several years behind grade level; that results in remedial teaching and a lower level of education for all.
How did you come up with the approach? The approach was based on common sense. We cannot expect people who are lagging behind to work less and still achieve the same results as those who have worked more in preceding years. Also, we have to make a fundamental decision. Are these boys unintelligent, or is it their environments that are affecting them negatively?
We put together a program which used sports and hip-hop as a carrot and focused on providing homework assistance, extensive mathematics tutoring and surrounded the boys with role models (UC Berkeley male students) as tutors and team leaders.
The program is intense; we work with the boys three times per week for 4 hours in the afternoon and 4-6 hours on Saturdays. One of the keys to the program is our excursions; it is difficult to have vision and dreams when one never has been exposed to something beyond the few blocks of inner-city where one resides.
What have been the most difficult roadblocks? We are encountering road blocks all the time. We are still a startup, though we have proven that black low-income boys can perform well. We now have an average GPA of above 3.0 across all the school sites where we are active.
The most difficult roadblock we encountered was being shut down by the school district because of a perception that we discriminate. We have created a model for the most difficult student population, African American boys from low-income backgrounds, and have proven it works. Unfortunately, due to legal restrictions, it is difficult to serve this population since we are unable to select students based on race, gender or other characteristics.
Luckily, thanks to the assistance of one of our Board members, we were able to move beyond this with the school district and are now experiencing them as good partners.
Of course, we are always experiencing challenges of hiring strong team members, retaining and motivating students, working with parents, and many other issues.
Is M3’s approach scaleable? When I started M3, one of the goals was to create a scalable and cost-efficient model. Because these were some of the founding thoughts, we constructed the program around these objectives and are managing to have a cost per student that is significantly lower than other programs working with these types of students. In fact, we have lower costs and better results (in most cases).
We have managed to accomplish this by leveraging the resources we have through partnerships with other organizations and also measuring everything we are doing to ensure we get the results we desire. If we fail to achieve the results, we are able to evaluate our performance from an objective perspective.
This has been difficult to engender since most non-profit organizations are more “touchy-feely”; we want to ensure that we are both empathetic and results oriented.
A personal note from KG. I cannot have this opportunity to speak to all of you without appealing to your generosity.
Since more than 50% of US African American males fail to graduate high school, and 64% of those who drop out end up in the penal system, one of the strongest ways to lower crime is to ensure that these boys receive a good basic education.
The absolute proof is that less than 1% of college educated black males end up in prison while 64% of drop-outs end up there.
Please feel free, whether to fight crime, enhance education or because of racial pride, to donate to M3. Please visit our website; click to donate or send a check to M3 Foundation, 832 Bancroft Way, Berkeley, CA 94710
In spite of the importance of Obama’s success in office, there is only so much I can read on a subject before I become jaded. As a result I try to make my sources as objective as possible, which is difficult when the subject is political.
I’m also not a political junkie, so in looking for ‘how’s it going’ information I tend to skip sources with rigid ideologies, since I pretty much know what they will say.
(I must say I find it amusing and satisfying that we finally have a president that both the far right and far left don’t like.)
I did find three articles to share, two short and one longer.
The first is a compendium of opinions from a varied group of Wharton professors, one phrase I really liked was when Obama was termed “short on ideology and long on pragmatism,” an attitude I wish the entire country would adopt. I also found it amusing that he was downgraded for attacking too many major topics at once—healthcare, the economy, two wars—as if he had any choice.
Entrepreneurs face difficulties that are hard for most people to imagine, let alone understand. You can find anonymous help and connections that do understand at 7 cups of tea.
Crises never end.
$10 really does make a difference and you’ll never miss it,
Yesterday was Bosses Day and in honor of that I’m going to share some information on bosses—BIG bosses.
Yesterday I shared quotes from Amazon.com CEO Jeff Bezos that focused on entrepreneurial topics, especially stock and its price.
I want to share three comments from Jeff Bezos today, because tomorrow’s post is about him.
Here are some of my favorites.
Today I have the pleasure of interviewing M3’s founder 
The first is a 
