What Great Leaders Do Differently

Great Executives: Email & The Art of Communication

2006-09-29T17:17:00.000-04:00

The link to the title tells it all.
We know that great leadership is about distinguishing yourself, demonstrating the highest moral and ethical standards, and positioning yourself as an example for others.

The wonderous age of real-time digital communication and digital footprints has introduced a whole new set of tools that allow us to continuously gauge our corporate and government leaders.
The most striking sword of course is e-mail, an application that can undermine the most valiant of leaders. Best practices in executive leadership necessarily includes a focus on how, where and when we put our thoughts into writing.

Of course, the HP fiasco cautions leaders that telephones of any kind can prove harmful if not used properly, but great leaders can expect that anything they put in digital format (a word document, an email, a text message, an instant message) has a chance of appearing on the front page of tomorrow's newspapers.

Study Says 26% of Managers Aren't Trained To Manage

2006-09-28T09:37:00.000-04:00

This week's WSJ profiled Rasmusssen Reports, a staffing company in NJ and a poll that it conducted which says 26% of managers surveyed "don't get enough training to handle their responsibilities..."---and the implication is that managers are saying "I need help to do my job and to manage people more effectively..."

While the report doesn't address how/why these managers were elevated to their current roles, it does underscore what Leadership IQ national reasearch studies keep pointing to: the biggest challenge facing just about every company is not just how to motivate underformers, but how to deal with slackers. Click on the link to this posting to find a good solution!

Profile In Leadership: An Oracle at Oracle

2006-09-20T09:36:00.000-04:00

For those that missed WSJ Sept 18th profile of the turnaround taking place at Oracle---it provided a great case study in leadership--and how the most basic concepts can change the direction of the biggest battleships.

Its hard not to respect the accomplishments of Oracle Chairman/CEO Larry Ellison. He's an industry titan, runs a company that dominates its space, a self-made billionaire, and he has one heck of a yacht. But those accomplishments haven't come without Oracle getting across the board low scores on leadership practices. Ellison is known to be a screamer, a control freak and he's changed his senior staff more often than other CEO's turn in their Mercedes for a new model (and not always for a new Mercedes--but that's another issue).

As Oracle's dominance grew, the company's focus on customer service languished. In the old days, Oracle didn't seem to need to cater to customers. As software sales soared in the 1980s and 1990s, Oracle salesmen joked that they could simply sit back and take orders.

Per the WSJ article--and more poignant: "...Barry Libenson, chief information officer at industrial-products company Ingersoll-Rand Co. says Oracle used to have a "horrific" reputation for aggressively selling software and then ignoring the customers who bought it."

Ellison's strategy has been to snap up competitors--spending billions--with the goal of acquiring customers and up-selling them to Oracle products/services. The PeopleSoft deal is the most striking example. The PacMan strategy increased market share---but it also confused internal management, caused dissention at the top levels--and most importantly--disenfranchised customers---people that allocate IT budgets that amount to tens of millions a year. Customers would call Ellison's office directly to voice their frustration about the lack of service and support--and he didn't return the calls.

But Larry made the right leadership decision by elevating Chuck Phillips, the co-President. Chuck has a proven track record for focusing on the most important element to running any business: COMMUNICATING WITH CUSTOMERS. Under Chuck's leadership, Oracle initiated a completely new style of management that aggressively solicited and embraced customer input and feedback... The results so far: corporate customer perception has gone from harshly negative to positive, sales and market share have increased (of course, that's been helped by the PacMan strategy)---and shareholders and investors are voting with their checkbooks---Oracle's stock price is up more than 30% ytd--in an otherwise lackluster environment for others stocks within the sector.

Big Salute to Chuck Phillips--Semper Fi!

Another Common Myth Shredded: CEO Diplomas

2006-09-18T16:06:00.000-04:00

As dutifully noted in Carol Hymowitz WSJ column--most CEO's of the biggest corporations didn't attend Ivy League schools--and most telling was the observation by Warren Buffet (University of Nebraska) : "I don't care where someone went to schoo...that never caused me to hire anyone or buy a business.."

Proving yet again that for those who think that leadership status is determined in the classroom---it actually starts in the School of Hard Knocks.

HP Board Crisis

2006-09-15T09:38:00.000-04:00

I must be saying something right... click on link to latest issue of Red Herring and my observations on board room leadership...

Leadership Strategy That Never Goes Out of Fashion

2006-09-15T08:40:00.000-04:00

Retailing may be one of the most difficult of industries when it comes to succeeding as a leader. After all, fashion trends will trend--which means you always have to stay in the curl of the wave.
A few missteps can cause even the biggest retailers to spiral, impacting everything from sales to brand value to employee morale and motivation.

When faced with the challenge of a sagging brand image, Ann Taylor Stores reached from within to promote Kay Krill to CEO. Today's WSJ profile spotlighted key lessons in leadership that transcend to any company that's dependent on staying in tune and staying in touch with consumers.

If you don't subscribe to the WSJ online, the title link may not work..but Kay's Top 5 Leadership Rules are illustrative of truly great leadership
1. Know Your Client
2. Have an action plan and secure buy-in from the senior leaders who need to execute the plan.
3. Evolve. Roll with the punches. Stay in the curl of the wave.
4. Constantly Communicate with employees at ALL levels.
5. Stay positive and optimistic--and display that optimism to all of those around you.

GroupThink: Brainstorming Is Good, Because Why?

2006-09-13T18:08:00.000-04:00

How much time do you spend fostering team cooperation and input---because some textbook or manual told you that brainstorming in groups is the holy grail?

Hats off to David Freedman and Inc. Magazine for flushing out a myth that too many managers subscribe to.

CEO Scorecard: Bristol Myers Squibb Overdoses

2006-09-13T08:27:00.000-04:00

One too many pushes of the envelope while under the microscope...That seems to be the reason why Peter Dolan was invited to step down from his job as CEO...

Per the nationwide research study that Leadership IQ published last year---the majority of CEO's aren't fired because of bad stock performance (well, Sumner Redstone is entitled try and prove that theory wrong)---and its unusual for a Fortune 100 CEO to get fired because they pushed the envelope too far while the company was still technically on probation in connection with violating other laws in the recent past.

Is Peter Dolan a sinister guy that didn't have any respect for authority and did what he had to do in a difficult business environment. .Hard to tell, but no doubt that the clock was ticking on Mr. Dolan for the past many months, and the mis-handling of how to deal with a competitors campaign to launch a cheaper alternative to the $3 billion a year Plavix will no doubt prove to be a text book case study...(in law schools, not business schools)

What Great Board Members Do Differently

2006-09-13T08:15:00.000-04:00

Well, for one thing---great board members need to go to great lengths to make sure that invasion of privacy is covered in their E&O policies.

One would like to think that members of Fortune 100 boards read the newspapers and might have been following the script taking place in Hollywood where Brad Grey and other studio execs purportedly used a gumshoe named Pellicano to secure phone records of adversaries.. My 2 year old knows that the only people allowed to break the law and secure private information is Uncle Sam. They do it every day..sometimes with a warrant, sometimes without...a little intimadation and a little gold badge go a long way...

Whoever thought that it would be okay to track down a leaking board member by tapping into personal phone records failed to appreciate the legal ramifications, even if it worked...But it wasn't kosher.. This is NOT the mindset that you want from a board member...even if they all vote unamimously in favor of the idea... God forbid this type activity forces regulators to impose independent directors on every public company board.

CEO Golf Scores Handicap Share Return

2006-09-08T12:49:00.000-04:00

I couldn't resist posting this story re: inverse relationship between golf handicaps and stock holder returns..... Segues nicely into Leadership IQ's landmark study "Why CEO's Get Fired"
... from USA Today

"...Golf Digest magazine Thursday releases its biennial rankings of the top CEO golfers, and a USA TODAY analysis finds that two-thirds of the best 12 have seen their stock perform worse than the Standard & Poor's 500 index in 2006...."

HP Board Sets New Standards in Leadership

2006-09-08T08:20:00.000-04:00

OK, this week's disclosure that all but one HP Board member authorized violating the privacy of one of its shareholder-elected Board members (to determine if he was the source of news leaks to the press about this publicly held company) doesn't actually set new standards in leadership.

This kind of thing happens every day...if the leader of our country can do it, why can't the leaders of the biggest companies in America?

We're working on putting together a new survey....including a question..."If you thought a company employee was criticizing management on a blog, or if you thought he/she was using his home computer and personal email address to send messages that were critical of your company, and your corporate counsel said 'it seemed to be legal' for you to tap into the employee's home computer to find out if your suspicions were true, would you do it? Post your comments, or email me at mark@leadershipiq.com!

CEO Scorecard--Ford Pulls Out--Sumner's Summer

2006-09-06T08:17:00.000-04:00

If any company could use a dose of Murphy's laws right now, -its Ford ..Notwithstanding the fact that Bill Jr. did to himself what the board would have been to afraid to do..which makes Bill an intuitive guy that realized change in the auto industry isn't going to come from within....(unless Ghosan put himself out as a free agent)..

The biggest challenge Ford faces (aside from coming up with a turnaround strategy that can get any kind of traction), its motivating its management and delivering inspiring change-leadership messages..but aren't they stymied by a business model that has a anchor around their neck (labor union bleeding them dry) ??

Alan Mulally, the new CEO from Boeing turned around a fat elephant for sure.....he's clearly a smart turnaround guy..and proved his mettle dealing with union leaders....but the Boeing battleship was sailing in a different ocean....and Ford (just like the other US auto companies) fate is dependent on meeting the needs of ordinary consumers...so its a retail business (although some would say its a consumer finance business)...Lets hope for the sake of America that Mulally can be right in leading strategic decisions that can prove right, after all, the US auto industry has been wrong for the past two decades.

Reading about Sumner Redstone's madcap adventures over the past two weeks makes me want to buy more Pfizer stock......Since Redstone doesn't have a Board that he needs to answer to, Murphy's Law about why CEO's get fired doesn't apply---Redstone is completely focused on share price and he's got the mindset of a day trader....making bets on long-term 'stories'--but changing his mind with every tick...Who could feel sorry for Tom Freston? Sure, he was fired from his job as head of Viacom in under a year. but he's walking away with $50 million in cash, not including options...Gotta love Hollywood.

Happy Employees=Happy Shareholders

2006-09-03T16:21:00.000-04:00

Hats off to Paul Brown at the NY Times for picking up on David Sirota's findings re: correlation between employee attitude's and company stock price.

"...In both 2004 and 2005, the stock prices of companies with high employee morale (at least 70% expressed overall satisfaction with their organization) outperformed similar companies in the same industry b a ratio of 2.5 :1... Stock prices of companies with medium or low morale lagged their peers by greater than 1.5 :1..."

What makes an employee enthusiastic?
1. Fair treatment (equitable wages/benefits)
2. Sense of achievement in one's job and perofrmance
3. Camaraderie among co-workers.

How To Fire 400 Employees: By RadioShack

2006-08-31T08:40:00.000-04:00

Straight out of Great CEO Bloopers...August 31 2006--Fort Worth, Texas--"400 RadioShack employees located at the company's headquarters were notified of their immediate termination via email.."

Congratulations to Julian Day, appointed CEO last month (after the company's former CEO resigned after a string of mishaps including multiple DWI's, wife-beating allegations--and lying on his resume--not to mention driving the company into the ground)......Julian's first leadership mission was to embrace the power of technology---which is the foundation to RadioShack's business---as sending a group email was the most cost effective and efficient means to let the 400 workers located with corporate headquarters office know they were being dismissed immediately.

But most important--the shareholders reacted postively to the news--RadioShack shares rose 2%

CEO Firing Squad-This Week

2006-08-19T11:23:00.000-04:00

Motion Picture Distribution executives fired ‘for cause'

Canadian Press

TORONTO — Motion Picture Distribution Inc. says former chief executive Patrice Theroux and general counsel Paul Laberge, who left the company last month, were fired “for cause.”

The company said in a release Friday that Mr. Theroux and Mr. Laberge, who left July 19, had been “willfully deceiving and withholding material information from the board, advancing business activities for personal gain and misusing confidential information and company financial and other resources for personal gain.”

Above is perhaps an abberational example of why CEO's get fired---the most common reasons can be found by clicking on the title link...have a great weekend!

Negative Feedback from The Boss

2006-08-19T11:10:00.000-04:00

Snipppet below from today's NYT business section profiles one 'expert' opinion on how to deal with negative feedback in the work place....As much as I do agree with the opening paragraph... it gets murky thereafter...

"...NOBODY likes receiving negative feedback from the boss. But you can use it to your advantage, Psychology Today argues.

Step 1 is not making the situation confrontational. “Sit back and take it in,” Judith Sills writes. “Save your defense — your explanation, your clarification, your justification, even your legitimate outrage — for later when it might do you some good. Your best first defense against criticism is no defense at all.”

Step 2 is to appear to listen. Actual listening is even better, says Ms. Sills, who is also a psychologist. And the ultimate response would be “to validate” what you have heard.

Responding with “I see what you mean; I do get long-winded and caught up in the weeds” is an example of validation, she writes, adding that most of your supervisor’s “irritation with you will vanish when you let him know you heard what he said and you know what he means.’’

Now this is fine, but it does not address that a) the criticism may not be valid and b) even if it is, it is going to make you feel bad. Ms. Sills’ advice is to give yourself a maximum of three days to sulk, then try to use the feedback productively by asking yourself:

¶“What part of this is true?”

¶“Have I ever heard this before?”

¶“What would I have to give up if I changed?

Slackers in the Workplace--What it costs.

2006-08-17T12:42:00.000-04:00

This past Sunday, CBS News Sunday Morning aired a special report on slackers in the workplace. This entertaining (and troubling) report featured commentary from Leadership IQ's CEO Mark Murphy.

My head is talking mid-way through the segment (5.50 minutes into the 10 minute special program)

Why New Hires Fail--What To Do About It

2006-08-04T21:16:00.000-04:00

Last September, Forbes Magazine cited our Leadership IQ study that indicated "...46% of newly-hired employees will fail within 18 months, while only 19% will achieve unequivocal success. But contrary to popular belief, technical skills are not the primary reason why new hires fail; instead, poor interpersonal skills dominate the list, flaws which many of their managers admit were overlooked during the interview process..."

Now, one year later, Inc.com's Stephanie Clifford has written an insightful report on this exact dilemna, and provides a detailed look into the many software applications being used to help mitigate the cost of bad hires.

As Stephanie points out, there are several thousand systematic approaches, evaluation tools, and behaviorial tests on the market, if only a few are proven to address the spiraling costs of bad hires. Bottom line--make a bad hire, it can cost 1.5-3x the salary... I'm a fan of scientific and back-tested applications that can reduce costs, even if I believe that the hiring process can be greatly improved by embracing some very basic common sense approaches. You'll have to take my seminar to learn what we've learned works best, but the Inc.com article makes for good reading.. Just click the title to this posting..and enjoy!

Lioness of Leaders : Coke's Mary Minnick

2006-07-29T14:44:00.000-04:00

This week's BW profile of Coca-Cola's Mary Minnick provided a good glimpse of what it takes to be a great leader, but also provided a stark observation of how seemingly great leaders tend to run the risk of overlooking the most important ingredients to leadership greatness. Unlike the secret of the ingredients to Coca-Cola, the ingredients to truly great leadership are well-publicized, but combining the right mix is most important.

Drivng bubbly ideas that re-invigorate aging brands are true hallmarks of leadership. And if anyone deserves a long standing ovation for demonstrating great marketing leadership, its Mary.

As long as you manage your leadership role within the proper perspective, and take care not to disenfranchise those that are entrenched and standing ready to burst your bubble the moment the sizzle turns into suds.

What Great CEO's Do Differently

2006-07-29T12:34:00.000-04:00

The most poignant Great CEO observation of the week comes from Schering-Plough's Fred Hassan. However obvious the observation is--it illustrates the simplest solutions are at the tip of our nose....and indirectly re-enforces everything that our studies have found...including the fact that too many CEO's still haven't figured it out.

Here's the excerpt from Harvard Business Review, courtesy of the NY Times.

SALES HELP It sounds so simple, but chief executives often forget it: If you want to increase revenue growth you need to make sure the sales force buys into the plan. “No restructuring or strategy will succeed long term unless you get control of your top line,” Fred Hassan, the chief executive of Schering-Plough, said.

In an interview with Thomas A. Stewart and David Champion in Harvard Business Review, Mr. Hassan said: “We make it a priority to educate people on the front line about the company’s strategy. That means letting them in on what I’ve been talking about with top management.”

He adds that in terms of importance “the sales force has to be up there with R.& D. and the global functions.”

Why doesn’t senior management typically pay enough attention to the sales force?

“Most C.E.O.’s have financial, science, marketing, legal or manufacturing backgrounds — and no sales experience,” Mr. Hassan said. “So they don’t identify with the people who interact with customers. I think that is where the disconnect comes from.”

Firing of Pfizer CEO : Case Study in Leadership?

2006-07-29T12:09:00.000-04:00

Pfizer CEO Hank McKinnell was replaced by the Board of Directors, but will remain Chairman of the drug maker thru the end of 2007.

According to the NY Times--underlying reasons included "irascible nature"--and growing heat about McKinnell's compensation package. Since taking the helm in 2001, Pfizer's stock price has dropped 40% (vs. a 14% drop in the American Stock Exchange's industry benchmark index).. Despite the massive loss in market value, McKinnell took home $16 million last year, and his pension will pay him $6.5 million for life, or if he prefers, he can take a lump sump of $83 million.

Interestingly, Mckinnell was awarded Stanford University Business School's 2003 Excellence in Leadership Award.--while the company's share price was dropping. Perhapse the award had something to do with the fact that McKinnell is an alumni of the grad school?---and while share price shouldn't be the dominant gauge of CEO leadership (or should it?), massive increases in pay coupled with massive drop in stock price would lead the common man to believe something is awry with the way this company is being managed. Clearly a Board of Directors issue.

As observed by the Hartford Courant "A big part of the problem is the iron triangle of entrenched management, outside pay consultants and board compensation committees stocked with retired CEOs. Funny how the non-corporate folks on boards - professors and public-policy types - rarely find their way onto compensation committees. What, they don't have the experience? Exactly.

Pfizer, for example, has three former large-company CEO's on its four-person compensation committee, including the compensation chairman, Dana G. Mead of Tenneco. Pfizer has several board members with other backgrounds.

When You Ask For References...

2006-07-27T13:22:00.000-04:00

We all know that making a critical executive hire is a major investment. And in today's competitive world, filling slots is a time-sensitive task--Too often, the CEO wants it done right away--he's got sales goals to meet, deals to initiate, new products to be developed, all in the race to meet analyst forecasts. And the HR dept wants it done however the CEO says it should be.

Here's a tip: Do it right, not right away. You already know what dollar cost of recruiting, hiring, and indoctrinating a new exec into your organization. Add 20-25% to the base compensation, and that will remind you what your investment is. Not counting the 'get up to speed' time factor.

Of course you ask for references, and sometimes you do a cursory check. For top guns, you do extensive background checks. Stop. Think about references again. Most of us automatically think "too subjective". You're dead wrong. Subliminal messages within a reference often prove to be more revealing than any other kind of background review.

Don't believe me...let me refer you to the expert, Doug LaPasta---anybody in the HR field for more than 15 minutes knows Doug..His CV includes more than three decades identifying applications that other people only dreamed of...tools that he proved throughout the 15 years that he ran the Human Capital division for the world's biggest bank. .And we all know that big banks are particularly focused on investments, especially their own.

And tell Doug that I referred you...

Great Management Tips

2006-07-27T13:16:00.000-04:00

All the credit goes to a fellow named Denny Hatch--the excerpts from today's newsletter:

* Before calling a meeting to spring a new idea, think about privately giving each of the attendees a heads-up on what you have in mind.

* Letting an individual in on something before it becomes public knowledge is very sexy and can win friends and influence people.

" “The secret of good PR is letting people in on what you are doing."
—Evelyn Lawson

* "It is amazing what you can accomplish if you do not care who gets the credit."
—Harry S Truman

* Try holding a meeting in a room with no place to sit and see what happens.

* If you run meetings, be familiar with “Roberts Rules of Order."

* If you run meetings, stick to the agenda or you will never get out on time.

Talking Head Gets Foot in Mouth

2006-07-26T13:51:00.000-04:00

If you subscribe to Institutional Investor, click on the link...but I'll save you the trouble and you can view the story below.

Below episode is an award winner i.e. Foot in Mouth...and perfect illustration of 'worst practices' from those that would appear to have missed their training courses in how to train leaders...

BTW--I'm blogging after having just made a presentation to 500 diversity executives attending a confernce here at the Four Seasons Hotel in Philadelphia---I only wish that I had seen the below story before my speech--would have made a great ice-breaker for my audience.

Lehman Brothers has been slapped with lawsuit by a former executive who claims she was fired for being too outspoken about racial comments allegedly made at a company leadership training session. Investment News reports that Karen McDermott, a former v.p. for internal communications, complained after a speaker at the seminar commented that “white people release the stress hormone cortisol whenever they work with black people.” McDermott, who is white, reportedly expressed her displeasure to her boss and was accused of being too negative – and advised she’d go a lot further if she didn’t engage in assertive behavior more typical of men. Lehman, according to IN, says the suit lacks merit.

You Can't Fire Me....I Quit!!

2006-07-24T22:13:00.000-04:00

Here's a sneak peak tidbit for you senior supervisors trying to explain to your CEO why your best worker just left.

Leadership IQ recent survey--vast numer of supervisors will say that employees quit to get more money someplace else....
but IQ research suggests that a vast a number of employees quit for reasons other than money.

What do you think? Post a comment! And look for the official release in the next few weeks.

Great Moments in Leadership

2006-07-20T10:13:00.000-04:00

One of the key points that we make in our program "What Great Executives Do Differently"
relates to the need for CEO's and leaders to be particularly sensitive to how they express themselves through body language. Simple concept, yet it never ceases to amaze me how so many CEO's stumble when it comes to expressing themselves in public settings and their overlooking rudimentary cultural practices.

However well intentioned, physical embraces, handshakes, and greetings need to be thought out carefully (in advance). Rule 23 from our course focuses on the most rudimentary guffaws that you can make, which in turn could de-stabilize a global partnership.

Pardon me for using George Bush as an illustration, but we couldn't resist sharing the out take from Jon Stewart's TV show last night. For those offended by Stewart's political humour, don't click on the Title link--but for all others, I hope George W.'s guffaw of the day brings a smile to your face.

Firing Squad Takes Aim at CEO's--This Week

2006-07-19T08:37:00.000-04:00

EVERY DAY CEO's are getting fired. Sure, its the natural course of evolution. Or, as some will contend (like us), many of these episodes can be avoided. Click on the Link if you dare.. Today's casualties:

Pep Boys and The Peter Principle
CHICAGO, July 18 (Reuters) - Auto parts retailer Pep Boys - Manny, Moe & Jack (PBY.N: Quote, Profile, Research) on Tuesday said Chief Executive Larry Stevenson has resigned, effective immediately, ending a term marked by shareholder calls for his ouster.

Coast Bank CEO Peters fired

The Bradenton-based company attributes it to 'management style issues'

By JOHN HIELSCHER
john.hielscher@heraldtribune.com

BRADENTON -- The top executive of the fast-growing Coast Bank of Florida was fired Tuesday over a clash with the board of directors.

Brian P. Peters was terminated as president and chief executive officer of both Coast Bank and its parent company, the publicly traded Coast Financial Holdings Inc.

Peters becomes the second CEO to be ousted at Bradenton-based Coast. His predecessor, Gerry Anthony, was moved out in early 2004.

Brian F. Grimes, who had been chief financial officer under Peters, was named president and CEO of both the bank and the holding company.

Anne V. Lee, who was promoted to chief operating officer in the shake-up, said Peters' departure came down to "management style issues."

"The board and Brian Peters had different management styles," she said. "They agreed that it wasn't working well, so they decided to part ways."

Verbatim from Business Week

2006-07-08T21:03:00.000-04:00

Actually, we didn't think that Business Week's Jon Fine would go to print with a snippet of our latest poll, but the July 17 print edition gave Leadership IQ a 1/4 page in its Up Front section. .Even if Jon thought it unseemly that our corporate communications firm thought our poll would make a good story and positioned the Up Front with tag "Annals of Public Relations", the fact is that 3800 of those polled responded within the first hour, and the overwhemling majority stated what we had thought, but we wanted to document our thoughts in defense of CEO's everywhere...(See results of the poll below the extract from the Business Week article)

VERBATIM
Annals Of Public Relations

From an e-mailed press release sent by Dave Overton of Boston-based Newman Communications:

Subject: Why the demise of Ken Lay?

One of the top reasons why CEOs get fired is "Denying Reality." ...One could argue in Lay's case that the truth he would be forced to confront (bankrupt company, displaced workers, destroyed nest eggs, prison, etc.) was so horrible, and so unavoidable, that his body simply shut down rather than confront a terrible reality.

Lay's death may be the equivalent of a child sticking their fingers in their ears to avoid hearing something bad. But a lot more final.

Mark Murphy is CEO of Leadership IQ, a Washington, D.C. based management consulting firm. Mark has some interesting thoughts on the demise of Ken Lay and how others can avoid his fate. Please let me know if you would like to speak with him. Thanks for your time.

But mostly we conducted this survey because every day we hear that CEOs are sick and tired of being mischaracterized because of a few bad people. This survey confirms what we already knew, but we wanted to have the data as validation. Ken Lay is not typical, and let's not make him the poster child for corporate CEOs. Somebody needs to defend the good men and women who lead our businesses. There will always be a few sinister people, but most CEOs are good and decent.

Our poll found that 96% of managers and executives say that their CEO would not have taken the same actions as Ken Lay. And 95% of managers and executives said that Ken Lay was not representative of the typical corporate CEO.

The bottom line is that most managers and executives see their CEO as a good person with solid values. And they do not think that Ken Lay is representative of the CEO that they report to. It's very easy to paint all CEOs with the same brush as Ken Lay, but the reality is that most leaders see Ken Lay as an aberration. He's not the norm.

We also found that 95% of managers and executives say that Ken Lay should have apologized to the employees and investors who were financially hurt by Enron's collapse. 87% said he should have received real jail time (not country club jail time). And 97% thought his character was corrupt.

In closing, we conducted this poll because we're not going to let good leaders get tarnished by a few bad apples. The media, if not the various watchdogs, including state and federal regulators, make it their job to uncover those that have gone awry or have abused their positions. The observation to be made by Mr. Lay's death is not that he should be mourned as a tragic figure, or that his rags-to-riches to-tarnished life story is one that we should sympathize. His passing is merely yet another reminder of lessons to be learned, and that his story was aberrational when evaluating the wonderful lives of the majority of those who are leading enterprises both big and small.

Willy Wonka Meets KitKat

2006-07-06T21:51:00.000-04:00

Now that the hubalaloo re: Ken Lay is yesterday's news...lets move forward.. If the link to the WSJ front page article profiling the bad taste left with Nestle's re-engineering of one of its most popular product lines is only accessible to WSJ subscribers--here's the synopsis:

Yes, those that have taken the Leader IQ test at www.leadershipiq.com will be tickled to see the coincidence of our test utlizing a chocolate candy manufacturer's dilemna to test decision making skills..
Flash to real life 2004...
Nestle challenged by declining market share in Kit Kat
Brings in highly regarded ice-cream marketing guru to re-invigorate sales.
He's given the rope to hang himself (and does an equisite job).
First steps include a massive re-engineering and introducing more than a dozen new flavors in under a year. This requires re-tooling manufacturing, marketing and distribution processes costing upwards of $75 million.

According to the article in WSJ, the guru short-changed the focus study process and based massive capital investments on very preliminary, first-taste feedback. Subsequent 'second-taste' results indicated the product line was dismal, hard to digest, and otherwise not commercially marketable--leaving distributors with stockpiles that couldn't be sold and ultimately melted in warehouses, and leaving Nestles with a major cavity in the heart of the wisdom tooth.

Peter Brabeck, Nestle's CEO, a true leader, took it all in stride--and more quickly than the Board of Zale's when they brought in a CEO to re-invigorate their retail jewelry business. Brabeck's 20-20 hindsight told him that former Coke marketing guru Chris White (a brilliant Kiwi and a great guy) had proven himself at Nestle by overseeing ice cream marketing, but didn't appreciate the difference between a soft product and a hard product..Ice cream is a seasonal product, and confectionary chocolate is a long shelf life product, the latter of which is more complex insofar as manufacturing, marketing and distributing. The capital investment is much more significant, and the cost of failure that much more noticeable. ..

After about 12 months, Brabeck tied the noose and balasted Peter, along with the the two dozen KitKat products that had left a bad taste in the mouths of distributors, retailers and most importantly, customers.
Lesson learned: LEADERSHIP. Steering a battleship is no easy task--its easy to say that had Peter Brabeck or Chris White tripped over our IQ study and appreciated the chocolate manufacturer dilemna, someone might have said "Ah Ha...Willy Wonka would have done better focus studies before expanding the line!" ..But they didn't.. But Brabeck rose to the occassion, bit the bitter chocolate and put his battleship back on course.. ..Hindsight is great, foresight is better, and our job is to bring these stories to the forefront so that others can keep their ships righted in placid seas and stormy weather.

The King is Dead. Long Live the King?

2006-07-06T13:11:00.000-04:00

Before the writer from Business Week actually goes to press with a classic, out-of-context lambasting that accuses us of "dancing on the grave" of Ken Lay, former CEO of Enron--I need to set the record straight.

1. Yes--its true--this morning, we canvassed 10,000 of more than 80,000 Leadership IQ newsletter subscribers with 12 poignant questions, and solicited their opinions on whether Mr. Lay exhibited the ethical standards and qualities that corporate CEO's are expected to exude and whether they or their company's CEO subscribed to the ethical standards and management/leadership style that Mr. Lay defended until the very end.

2. Yes--its true--we didn't couch our questions, and we didn't hold any punches in positioning our questions in a manner that one sharp criminal defense lawyer labeled "leading the witness"

3. Yes--its true--within the first hour after emailing our online poll, we received more than 750 responses, and 3 of those responses included personal emails from IQ subscribers that criticized our lack of sensitivity in the immediate aftermath of Mr. Lay's tragic and unexpected demise.

First, we sincerely extend our heartfelt condolences to Mr. Lay's family and those close to him. His passing was untimely, certainly tragic, and regardless of the epitaph he leaves behind in the minds of many, it was not our goal or intent to 'dance on the grave'. If the Business Week reporter mis-construed the conversation with our corporate communications firm and insists on believing that our poll was a PR stunt to gain attention, all I can say is 'shame on you'.

The fact is, responsible media reporters, as well as hundreds of clients solicit our opinions and viewpoints strictly because we've become recognized for our perspective on leadership standards and best practices. We don't need to leverage a tragic death to make our point.

We critique the shortcomings of leaders that have lost their moral compass, or have become distracted by any number of circumstances, just as often as we spotlight the exemplary standards and business practices that the vast majority of CEO's in this country maintain on a daily basis.

By combining these observations, and concisely articulating "what works and what doesn't", and otherwise providing 20-20 hindsight in advance of a train wreck, our firm has received recognition across the corporate landscape.

Aside from tooling around with Google Adwords to promote a series of off-site seminars that we hold throughout the country, we don't advertise our services--we don't need to. Word of mouth spreading from corporate boards to corner offices has been our maintstay since our firm was launched, and the results of those references speak for themselves. Our client list includes the most prominent public corporations, private enterprises and non-profits in the US---and an overwhelming number of these clients come back to us for follow-on consultations and presentations.

Ken Lay was the epitome of a corporate executive that lost his moral compass and sacrificed his ethics for reasons that will remain unanswered. However prescient he might have been in spearheading the build-out of one of the most formidable energy companies of modern times, however philanthropic he was to a select group of charities, and however high his pedestal rose in the minds of those that looked up to him, the fact of the matter is that he exhibited a unique disregard for the standards and the responsiblities that real leaders are depended on to abide by.

Mr. Lay's failure to recognize, acknowledge, or to shoulder any responsiblity for the missteps that led to the demise of Enron, the loss of thousands of jobs, the financial devastation that impacted the lives of countless employees and tens of thousands of shareholders was, and should always remain inexcusable. Not only did Mr. Lay mislead and manipulate the thousands that entrusted him with their life savings and their futures, but by virtue of his actions, the global media cast him, along with a few others whose names we all know, as a poster boy for "what's wrong with corporate America" and suggested that Ken Lay's actions was endemic to corporate chieftans throughout the country.

Ever since the time I've been labeled a 'turn-around expert', I've had a bird's eye view into the board rooms and executive offices of dozens of Fortune 100 and 500 corporations; as my role as been to come in and help fix things; I 'm happy to report that Mr. Lay was far from a typical CEO. Contrary to what the talking heads would like us to believe, Corporate America is ethically and morally sound.

And if my personal observations don't carry much weight with you, the dozens of proprietary polls that our firm has conducted over the years, encompassing tens of thousands of responses from executives and senior managers will document that overwhelming number of our country's business leaders subscribe to the highest standards and work towards serving the best interests of their employees, their shareholders, and their customers. The media too easily finds themselves at a loss when reporting on this truism.

Of course, there are exceptions...the media, if not the various watchdogs, including state and federal regulators, make it their job to uncover those that have gone awry or have abused their positions. The observation to be made by Mr. Lay's death is not that he should be mourned as a tragic figure, or that his rags-to-riches to-tarnished life story is one that we should sympathize; his passing is merely yet another reminder of lessons to be learned from, and that his story was aberrational when evaluating the lives of the majority of those who are leading enterprises both big and small.

Ken Lay Eulogy

2006-07-05T12:09:00.000-04:00

One of the top reasons why CEOs get fired is "Denying Reality." In milder cases, a CEO will quit rather than let a horrible truth puncture their fantastical views. Or they'll blame their workers or board. They'll craft all sorts of psychological defense mechanisms to avoid shouldering culpability.

One could argue in Lay's case that the truth he would be forced to confront (bankrupt company, displaced workers, destroyed nest eggs, prison, etc.) was so horrible, and so unavoidable, that his body simply shut down rather than confront a terrible reality.

Lay's death may be the equivalent of a child sticking their fingers in their ears to avoid hearing something bad. But a lot more final.

Welcome to Top Gun Leadership

2006-07-04T20:27:00.000-04:00

If your looking for non-ambiguous insight to what works and what doesn't in the realm of leading major corporations, private enterprises or non-profits, you've come to the right place.

This is where I'll be posting thoughts and observations that reflect my view on best practices for those seeking ways to improve their leadership skills and talents. No jibber jabber here; the goal of this venue is to publish timely, and time-tested approaches that can be leveraged immediately--and help make each of us better leaders, better mentors, better negotiators, better sales execs---and better the bottom line. Happy July 4th!