With News Corp’s culture making headlines around the world (and links to plentiful to choose) I was reminded of something I read recently about a new ethics compliance study (free registration required).
The new outlook has permeated the boardroom. In fact, only 22% of ethics and compliance leaders worry about senior management’s ability and desire to demonstrate and promote ethical conduct. Sixty-eight percent of the respondents stated that promoting an ethical culture creates long-term value for the business.
In fact, 45% of respondents are concerned that middle managers are not as invested in ethics initiatives as their superiors.
Think about this; senior management is ethical, but the guys in the middle area are the problem.
Funny, in almost all the ethics cases over the last few decades it’s been senior management that was the driving force and found to be at fault.
Most people respond to the tone and example set by their leaders.
But too often the goals and the pressure to achieve them reflect an unwritten message from senior executives—use whatever means necessary, just get it done.
I’ve never seen any statistics, but I’ll bet that if middle managers are guilty of anything it’s going too far to produce the results demanded of them by their bosses who are, in turn, responding to Wall Street.
I hope you have some time today, because I have some great interviews with, and commentary on, some great CEOs.
However, I’m going to start at the opposite end of the spectrum. As you well know, there are plenty of CEOs that aren’t great or even mediocre, but are just plain lousy. Here is Forbes list of the 10 Biggest CEO Screw-ups Of 2010.
Enough of that, now on to the positive
First up is one of my favorite CEOs, GE’s Jeff Immelt, who took the hard road in taking the company back to its roots building real products based on creativity and innovation—as opposed to the financial engineering that drove the company under his predecessor, Jack Welch—and building people for the long term.
It’s a bottom-up approach that shuns hierarchy, and places most of the responsibility for continuous improvement on the teams. … Mr. Immelt also sees himself as the champion of what he calls “large-scale entrepreneurship” at G.E. By that, he means identifying long-term market shifts — “what’s next,” he says — and then marshaling the company’s research, manufacturing and marketing resources to capitalize on the opportunity.
Next is Kathy Savitt, C.E.O. of Lockerz, a social network and e-commerce site, who sees cynicism as the start of corporate cancer.
“Another cell of cynicism is when you feel a company is not actually living out its core values.”
Sometimes CEOs step out of the top role with the explanation that they want to focus on a more strategic role, but how many of them say publicly that they aren’t very good? Barry Diller did just that when he stepped down at IAC.
“I told them the company wasn’t being managed correctly,” Diller, 68, said. “I never thought I was a very good manager. I mean I am decent, but I want to go back to what I am good at, which is looking for opportunities to grow the business.”
Before I get to today’s lineup I need to respond to an email question from a reader. “Joan” first assured me that she didn’t mind, but was wondering why so many of my posts played off articles in the NY Times and Business Week when there were so many sources available.
Simply, there is only so much I can read in the time I have available; I’ve read BW for decades and although I don’t like it as much now as I did in years long past, it still offers varied overviews on a large variety of subjects. As to the NYT, I like newspapers and these days it offers as much veracity and breath as I’m going to find. Enough, in fact, that I plan to keep it when it goes to paid subscriptions next year. (I also get my local paper, but it’s highly focused locally and on the region.)
As I’ve said in the past, I like stories about people, especially when they do the unexpected or the unexpected does them; today we have both.
First up, two with a horticultural bent. One tells the story of twins who have been traveling the East Coast sleeping in trees, while the other gives you a look at a book store in Humboldt County, CA, a place known for Giant Sequoias and pot, whose address was hijacked by pot growers as a return when mailing their product. (Hat tip to Gen, owner of North Coast Gardening, for sending me the link.)
You know all those articles you keep seeing about how Americans new frugality is a sea change and not a temporary reaction to past layoffs and current insecurity? Don’t bet on it as this story about Wall Street spending shows.
This next article highlights the importance of dying on your own terms. It resonates with me, because it focuses on dying at home (which I plan to do). You may not appreciate the subject, but death is something with which we all end up dealing—usually multiple times during our lives. It’s one of those things that is best thought about long before it’s necessary.
Finally, have you looked in your attic lately? I never had one, which may be one reason I can’t pass up a garage sale. An English couple clearing out their parents’ attic found an old Chinese vase; it just sold at auction for 69.5 million dollars (plus the 20% VAT). That’s enough inspiration to make you want to clean out your elderly relatives’ attics.
How profitable can a company be that takes social responsibility to its extreme?
What kind of corporate social responsibility is possible if Wall Street isn’t breathing down your neck?
For answers you need look no further than India’s Tata and America’s SAS.
I’ve already written twice about SAS, its amazing culture and the lengths they go to to take care of their people.
And then there is Tata, where Ratan Tata, Chairman of Tata Group, built a culture of innovation after India dropped its trade barriers.
… for his companies to survive and thrive in a global economy he had to make innovation a priority—and build it into the DNA of the Tata group so that every employee at every company might think and act like an innovator.
Notice it says every employee, not just the stars, designers or engineers.
Obviously good culture and good business, but not really extreme.
Extreme social responsibility follows a different path. In 2000 Tata Tea Ltd. purchased Britain’s Tetley Tea Company and shortly after sold the vast plantations in an economically underdeveloped community where it had been the largest employer for a century.
But the transaction was anything but routine. Instead of working out a lucrative deal with eager investment bankers, bribing local politicians to mollify them, laying off workers, and selling to the highest bidder, as some other Indian companies shedding a moribund business might have done, Tata Tea sold 17 of the 25 plantations to its own former employees. Layoffs were generally limited to one per household, and Tata gave a group of voluntary retirees enough cash to buy equity in the new company that was formed. (That company, Kanan Devan Hills Plantation Company [KDHP], still operates as an employee-owned enterprise.)
Although Tata Tea would henceforth maintain only limited business interests in the area (including some equity in KDHP), the company continued its active social role there. It still subsidizes a range of social services and KDHP employee benefits, including free housing for plantation workers, a private school, an education center for disabled children and young adults, and the newly renovated Tata General Hospital in Munnar. Tata still remains a major customer of KDHP, which helps guarantee a stable supply of tea at competitive prices.
Tata’s extreme culture is simple.
Since its founding in 1868, Tata has operated on the premise that a company thrives on social capital (the value created from investing in good community and human relationships) in the same way that it relies on hard assets for sustainable growth.
And at $70 billion it certainly is thriving.
Extreme culture is long-term and looks well beyond the next quarter and short-term profits.
Extreme culture is successful, but not in the US—Wall Street would never allow it.
I ran across this comment by Joseph Mason, professor of finance at Louisiana State University in an article I was reading and I couldn’t resist sharing it with you.
“Wall Street will always have more lawyers and more accountants and more brains than the regulators.”
So I scavenged around and found a few more to make up today’s QQ list.
Let’s start with a Wall Street proverb that sounds as if it were written by Goldman.
“Buy on the rumor; sell on the news.”
Economist Paul A. Samuelson also seems to have a fairly jaundiced view of Wall Street;
“The stock market has forecast nine of the last five recessions”
I can’t imagine why, can you?
This next one is from everybody’s favorite crook, Bernard Madoff. Knowing what we know now makes this comment even more ironic.
“Whenever I go down to Washington and meet with the SEC and complain to them that the industry is either over regulated or the burdens are too great they all start to roll their eyes, just like all of our children do when we talk about the good old days.”
But it’s will Rogers who gets the last word today.
“Let Wall Street have a nightmare and the whole country has to help get them back in bed again”
I am a fan of Adrian Gostick and Chester Elton; I reviewed both The Carrot Principle and The Levity Effect and highly recommend them. The books feel like fast reads, but digesting and using the (unconventional to some) wisdom found in each takes a bit longer.
The Daily Carrot Principle is the size of a desk calendar and offers much of that wisdom in bite-sized pieces by addressing one idea each day of the year, explaining it and providing a short description of the action needed to implement it.
I highly recommend The Daily Carrot Principle for yourself and for a gift—unlike a desk calendar you won’t want to get rid of it any time soon.
Recommendations
Many articles and books have/are being written about the Madoff scandal and dozens of other Ponzi schemes born of loose money and a wholesale ignoring of the old adage, “if it seems too good to be true it probably is.”
The most compelling book I’ve come across regarding Madoff is the inside look from Harry Markopolos detailing the eight years he spent trying to expose him and how the SEC refused to listen. Read this excerpt from How I Got the Goods on Madoff, and Why No One Would Listen to decide if it’s your cup of tea.
The message was practically the same in every one of those 14 meetings: “We have a special relationship with Mr. Madoff. He’s closed to new investors and he takes money only from us.”
When I heard that said the first time I accepted it. When I heard it the second time I began to get suspicious. And when I heard it 14 times in less than two weeks, I knew it was a Ponzi scheme. I didn’t say anything about the fact that I heard the same claim of exclusivity from several other funds. If I had, or if I had tried to warn anyone, they would have responded by dumping on me. Who was I to attack their god?
Another excerpt served up by Bloomberg Business Week offers a fascinating peek into Roger Lowenstein’s new book The End of Wall Street. Not that it is going away, but that its laissez-faire attitude may be.
The crash of 2008 put to rest the intellectual model that inspired, and to a large degree facilitated, the bubble. It spelled the end of the immodest faith in Wall Street’s ability to forecast.
Whether we choose to or not, we learn from the day we are born to the day we die. Sometimes our learning is conscious and intentional, but not always. Sometimes it makes us better people, sometimes not.
I have two stories for you today that clearly illustrate my premise.
Let’s start with the unconscious/unintentional (so we can end on a happier note).
For years before the global meltdown the media shared stories about the opulent lifestyle led by the wealthy and ultra wealthy. And the last couple of years the stories have revolved around how, instead of shopping until you drop, to shop so no one knows.
Two professors, HBS’ Roy Y.J. Chua and Xi Zou, an assistant professor at London Business School wondered if the people who lived this life style are different from the rest of us. Specifically, they asked,
“Does the availability of luxury goods “prime” individuals to be less concerned about or considerate toward others?”
Surprise, surprise; the answer is ‘yes’.
Next is a look at how intentional learning can not only reverse your life, but take you to rarified heights—as it did Shon R. Hopwood.
Hopwood was a mediocre bank robber—five banks over two years yielded only $200K— who spent a decade in prison. Now, prison is boring and a lot of felons spend their time in the library, specifically the law library, and Hopwood was one of them, but unlike most of them.
Mr. Hopwood spent much of that time in the prison law library, and it turned out he was better at understanding the law than breaking it. He transformed himself into something rare at the top levels of the American bar, and unheard of behind bars: an accomplished Supreme Court practitioner.
As you can see, unintentional learning can make you a jerk, whereas intentional learning can change your status from jerk to highly respected.
Do you remember Calvin and Hobbs by Bill Watterson? Of all the comics I’ve read over the years that is my all-time favorite. I even own most of the collections in book form.
I did Watterson quotes back in ’08 and I thought that almost leap-day would be a good day to share some from Calvin.
First, you have to understand how Calvin sees himself and, in doing so, you’ll understand a great truth of the modern world. “People think it must be fun to be a super genius, but they don’t realize how hard it is to put up with all the idiots in the world.” Although true, I’ve always reminded myself that for every person I think is an idiot there are at least two others who think I’m one.
It may not be original, but I have always like Calvin’s description of life, “Life is like topography, Hobbes. There are summits of happiness and success, flat stretches of boring routine, and valleys of frustration and failure.” That fits my life, except that the summits were all bunched together, with the last decade one continuous valley; I could do with a few more flats.
Calvin says, “History is the fiction we invent to persuade ourselves that events are knowable and that life has order and direction,” whereas I think that order and direction comes from within.
I’ve always thought that Calvin’s comment, “Careful. We don’t want to learn from this,” would make a great Wall Street motto.
But it is his thoughts on the possibility of other intelligent life in our universe with which I most heartily agree. In fact, I was saying something similar a couple of decades earlier.
“Sometimes I think the surest sign that intelligent life exists elsewhere in the universe is that none of it has tried to contact us.”
I have a stack of books waiting to be read, some I buy and some are sent by publicists for me to review.
Then there is the constantly growing list of books I hear about or see a review and want to read.
But I have only so much reading time and it’s shrinking as we get closer to the launch of our new product (stay tuned).
So I created a new category called Reviews and Recommendations and included MAPping Company Success’ ‘Book Reviews’ and Leadership Turn’s ‘Reading Recommendations’. I hope you find it useful.
Today, I have some interesting recommendations for you.
The first is from Jeffrey Krames, a literary agent who tells the fascinating story of a self-published book that sells for nearly $50 with an unwieldy title that instantly became a top Amazon seller. Whether or not you want to tackle the book you’ll enjoy its story.
Two European authors—Alexander Osterwalder and Yves Pigneur—spent years putting together a stunning book on business models entitled BUSINESS MODEL GENERATION. The two authors had a great deal of help with the design and content of the book, as it was co-authored by 470 Business Model Canvas practitioners from 45 countries…Within 48 hours the book ranked as high as #74 on Amazon, an amazing feat for most any business book and especially this one. Since then, the two versions of the book have occupied two of the top 25 slots on Amazon’s list of bestselling management books every single day.
After reading dozens of day-by-day articles and commentary on the financial meltdown, none of the myriad of books written about it really grabbed me. However, when I read a review of Henry Paulson’s newly published On the Brink: Inside the Race to Stop the Collapse of the Global Financial System in Business Week I was intrigued.
What got my attention (and made me ill) was the following quote.
“All were concerned with excessive risk taking in the markets and appalled by the erosion of underwriting standards,” he writes in his penetrating memoir, On the Brink. Yet they felt forced by competitive pressure to make loans they didn’t like, the former U.S. Treasury Secretary says.
“Isn’t there something you can do to order us not to take all of these risks?” was the gist of a question posed by Chuck Prince, who was still running Citigroup as the bank bumbled toward disaster.
This from some of the most powerful business “leaders” in the country.
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,
With News Corp’s culture making headlines around the world (and links to plentiful to choose) I was reminded of something I read recently about a new ethics compliance study (free registration required).
I hope you have some time today, because I have some great interviews with, and commentary on, some great CEOs.
The Daily Carrot Principle is the size of a desk calendar and offers much of that wisdom in bite-sized pieces by addressing one idea each day of the year, explaining it and providing a short description of the action needed to implement it.
Do you remember Calvin and Hobbs by Bill Watterson? Of all the comics I’ve read over the years that is my all-time favorite. I even own most of the collections in book form.
I have a stack of books waiting to be read, some I buy and some are sent by publicists for me to review.
