Business Insight Zone

Debated with myself whether to write about this, but then my friend Gini Dietrich said it better than I could have — and from the perspective of a P.R. pro:

Should Apple Have Disclosed Jobs’s Liver Transplant?

. . . I disagree that Apple and its board think Jobs’s health is a private matter. He has made himself a public figure synonymous with the brand; he is the face of the company. Many believe his health is instrumental in the stock performance of the company. While the U.S. has strict medical privacy laws, Jobs’s role as the company’s visionary trumps his right to privacy.

What she said — Apple could have done this much better.

Related story on this topic:

• USA Today: Jobs’ liver transplant shows money can make a difference

And three more posts from the archives:

• Steve Jobs’s health: a brief note. (28 July 2008)
• Banking on the founder’s mojo.
• Steve Jobs, rock star.

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A while back I got into a discussion with Tom Peters over Carly Fiorina’s role in reshaping Hewlett-Packard. He held that Mark Hurd’s success in improving HP’s operations would have been impossible without the groundwork that Fiorina laid to remake the company’s culture — and to give HP enough scale, through its acquisition of Compaq, to go toe-to-toe with both Dell and IBM.

Peters liked my eventual formulation of Fiorina as “Leader A,” the one who starts the revolution, and Hurd as “Leader B,” the one who implements the needed changes that build out and sustain that revolution.

Now I’m wondering if something similar has happened at Ford. Consider this excerpt from a comment Wally Bock left the other day:

[Mulally] benefitted from being hired by Bill Ford after Ford had done the CEO job for a while. Both parts of that are important. Bill Ford, as a Ford and key stockholder, had a leverage that no “hired hand” could ever have, inside the company, inside the family, and inside the board room. But it’s also significant that he had tried on the CEO job and had an idea of both how tough it was and what was needed. A year earlier, I’m not sure he’d have made as good a decision.

What do you think? What other examples of this phenomenon come to mind?

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Related:

• Ford’s Sustainability Focus.
• Would you give up scale for quality?
• Mark Hurd’s 3-minute management clinic.

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Image source.

You may recall that our colleague Russell Secker, who recently wrapped up a 25-year executive career with D&B and Hoover’s, embarked two months ago on the TransEurope footrace.

The grainy cell-phone picture above tells the rest of the story in a nutshell: Russ has finished the race, which took him and his fellow crazy intrepid runners 2,800 miles through Italy, Austria, Germany, Sweden, Finland, and Norway. In the picture, he’s standing at the final finish line at the Nordkapp — the northernmost point in Europe.

To recap: 64 days with no days off, at an average of 45 miles per day.

What can I say about Russ’s achievement that would tell you more than those simple — but unbelievably grueling — numbers? Our former colleague Rob Lifford got it right when he quoted Rocky IV:

“He is not human. He is made of iron.”

With that, I’ll just add my best wishes for Russ’s safe and speedy trip home — and for his re-accumulation of body fat, since he’s burned off what little he had during this adventure!

You can read the stage-by-stage account of the race at Russell’s blog.

Given its current bankruptcy, it might be easy to forget that General Motors was once the Colossus of the business world, and that Alfred P. Sloan (that’s him on the cover of TIME) was regarded in his own day not merely as a great executive, but as one of the greatest business leaders of all time. This has me thinking of a question that I’d like you to answer in the comments:

Who’s the best CEO in American business?

Related questions come to mind thanks to the Atlantic Monthly’s recent article, “Do CEOs Matter?”:

How much do the best CEOs matter to their businesses?

Why?

When do they matter most?

I look forward to having your thoughts on these questions.

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Image via Beth Kanter, shared under a Creative Commons license.

It may be a case of spring fever.

Ever have one of those weeks when you work like crazy but finish very little?

*raises hand*

So, here are varied items of interest to launch you into the (U.S.) long weekend.

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>> Three IPOs in the span of a week? Pinch me! – And not just three IPOs, which makes for a tidal wave of activity relative to what we’ve seen lately, but three successful IPOs. DigitalGlobe, SolarWinds, and OpenTable all made a good showing in their market debuts between May 14 and May 21, which may encourage other would-be public companies to come forward (or, at least, encourage those with NamesLikeThis).

From the end of last summer until this spring, the IPO market has been mired in an awful slump — worse than anything in many years. But maybe we’re seeing the right baby steps as the market gets its feet back under it.

Related:

• A (relative) flurry of activity in the IPO market.
• Silicon Valley, the IPO drought, and the culture of innovation.

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>> Looking for work? Want to make a difference in the world? — Change.org has launched an initiative it calls Jobs for Change. Danny Moldovan, who heads the program, told me that “Our goal is to recruit more people into careers in service, and we’re currently working to build the largest database available of jobs in the nonprofit, government, and social enterprise sectors.”

The project is backed by several nonprofit groups and employs its own career advisers to offer advice to job-seekers. It also lists jobs in various categories. I know lots of job-seekers who are having to get creative with their career planning — who knows but what some of them will end up in the not-for-profit sector, earning a living  while trying to make the world a better place?

Related:

• JoblessJoe: when the going gets tough, the tough MAKE something.

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>> Some of the biggest turnarounds happen the fastest. — That’s the punchline of an article at Slate’s “Big Money” site that centers on Sergio Marchionne’s turnaround of Fiat. To be honest, the article could have benefited from a lot more detail on the turnarounds at Fiat, H-P, and Boeing, but the moral of the story still hits home:

Just as bad management can erase billions of dollars of value (think of the $36 billion that Daimler paid for Chrysler), good management can create it, and often more quickly than you’d expect. One difference between the best CEOs and the worst is that the good ones work at a faster pace. Murdering a major company can take many years of painstaking ineptitude. Successfully turning it around takes much more skill but sometimes less time.

Go back and look at other great turnarounds, e.g. Gerstner’s at IBM, or Jobs’s return to Apple. They don’t happen overnight — but they don’t take ten years, either.

How long are YOU taking to turn things around for yourself or your company?

Related:

• Mark Hurd’s 3-minute management clinic.
• The turnaround CEO — what to look for.

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>> Ursula Burns will succeed Anne Mulcahy as CEO of Xerox. — Three great things about this: (1) a woman is succeeding a woman running an old-school, business-to-business enterprise (I’m sure Tom Peters approves!). (2) Burns is the first African American woman to head a Fortune 500 company. (3) The succession comes as absolutely no surprise, since Burns has been groomed for this role for years.

Thinking of turnarounds, there was a time, not so many years ago, when Xerox needed one desperately. It got it, thanks to Mulcahy and Burns, and it looks to be in good hands going forward.

Related:

• CEO succession — successes and failures.

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>> When the going gets tough, the really tough grow market share. — Cisco has talked openly about its ambitions to “move with a speed nobody has ever attempted” into dozens of new areas. This piece from The Register talks about the networking giant’s grand design, which is founded in its existing expertise in moving huge amounts of data traffic across wired and wireless networks.

Mostly, I just love Cisco’s chutzpah. It could sit on its laurels, quietly dominating one or more areas of networking. Instead, it’s taking advantage of (a) the market downturn, (b) its own technical prowess, and (c) a monstrous pile of cash to elbow aside competitors in areas likely to grow rapidly for years to come.

Pulling it off will take some doing — but if any company is likely to do it, it’s Cisco.

Related:

• Disorganization Negates Talent.

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Photo by Brendon, used under a Creative Commons license.

Well, actually, it would be “Film in late June” – because that’s when Hoover’s EVP Russell Secker will finally be done running across Europe, from south to north, in the TransEurope 2009. A summary of the insanity:

• Starting point: Bari, Italy (near the “boot heel”).
• Finish line: the Northern Cape of Norway, well above the Arctic Circle.
• 2,800 total miles.
• 64 days of running.
• Average of about 45 miles (72 kilometers) per day.
• No days off.
• Accommodations in gyms or tents.

Russell, besides recently retiring after three decades with D&B and Hoover’s, has run all of the major marathons in the world, plus many ultramarathons. In 2005 he ran the Transe Gaule, which traverses France in the course of three weeks, and in 2007 he ran the Deutschlandlauf, which does the same thing for Germany.

But that wasn’t enough.

At Russell’s blog, you can read day-by-day updates and view photos documenting his progress across Europe. (Pretty amazing, when you think of it, that he can keep up the pace with his posts after days in which he’s run the equivalent of back-to-back marathons.) One of the most interesting things to me is that Russell now has old friends who ran those same races across France and Germany in past years. There’s a very small band of ultra-ultrarunners in the world, and they seem to stick together.

Keep it up, Russell! All of us here are rooting for you from afar!

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Related:

• Russell’s participant page (in German) at the TransEurope 2009 site.
• My 2005 feature on Russell in the Transe Gaule.
• Russell’s race blog.

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The pokey. The joint. “Inside.” The ol’ Graybar Hotel.

Call it what you will — it’s where Bernard Madoff belongs, for the rest of his life. No bail arrangement should be made, despite his lawyer’s pleas.

This isn’t a legal argument (which is good, since I’m not a lawyer), but an ethical one.

Madoff has confessed to swindling as much as $65 billion from a host of people and institutions who trusted him. This list includes one of the world’s great voices of conscience, plus many nonprofits that fund all sorts of good works.

If Madoff had used a physical weapon to rob a store of 1/10,000,000th as much money, no conversation about bail would be held. We’d say he’s a menace to society and keep him behind bars until sentencing. Even if he never planned to use the weapon, even if he never meant to hurt anyone, we’d keep him inside — and rightly so.

Madoff’s weapons weren’t tangible. He was much more sophisticated than your typical gunsel. It doesn’t mean the harm he did was any less real, or that his punishment — for stealing ten million times as much money — shouldn’t be equally severe.

Let his family talk to him through a pane of glass.

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Photo by Ben, used under a CC-Share Alike license.

Warren Buffett’s Chairman’s Letter is more famous, and justly so, but I love this portion of the Berkshire Hathaway annual report [PDF link] — emphasis in original:

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BERKSHIRE HATHAWAY INC.
ACQUISITION CRITERIA

We are eager to hear from principals or their representatives about businesses that meet all of the following criteria:

(1) Large purchases (at least $75 million of pre-tax earnings unless the business will fit into one of our existing units),
(2) Demonstrated consistent earning power (future projections are of no interest to us, nor are “turnaround” situations),
(3) Businesses earning good returns on equity while employing little or no debt,
(4) Management in place (we can’t supply it),
(5) Simple businesses (if there’s lots of technology, we won’t understand it),
(6) An offering price (we don’t want to waste our time or that of the seller by talking, even preliminarily, about a transaction when price is unknown).

The larger the company, the greater will be our interest: We would like to make an acquisition in the $5-20 billion range. We are not interested, however, in receiving suggestions about purchases we might make in the general stock market.

We will not engage in unfriendly takeovers. We can promise complete confidentiality and a very fast answer — customarily within five minutes — as to whether we’re interested. We prefer to buy for cash, but will consider issuing stock when we receive as much in intrinsic business value as we give. We don’t participate in auctions.

Charlie and I frequently get approached about acquisitions that don’t come close to meeting our tests: We’ve found that if you advertise an interest in buying collies, a lot of people will call hoping to sell you their cocker spaniels. A line from a country song expresses our feeling about new ventures, turnarounds, or auction-like sales: “When the phone don’t ring, you’ll know it’s me.”

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Why I love it: the clarity, the lack of fluff, and the directness. “Here is how we will do business, and here’s how we won’t.” Period. Oh that we could all be so disciplined as to build businesses that can operate this way.

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Related reading:

• Bloomberg News: Buffett Says Economy ‘In Shambles,’ Promises Recovery
• BIZ: Munger on “the Shoe Button Complex.”
• BIZ: Here’s why I harp on Warren Buffett’s good sense.

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In his book First Things First, Stephen R. Covey used a diagram that has become famous in time management circles:

You should spend your time in Quadrant II, working on the valuable projects that are important but not urgent. Quadrant I is for genuine emergencies — the house is on fire — and Quadrant IV should be avoided at all costs.

The real source of poison, in Covey’s model, is Quadrant III, which is tempting to enter because the things in it are urgent, but which ought never be entered at all, since they are unimportant.

Maybe later we can discuss more of the implications of this, and ways that the model can be deepened. For now, a couple of questions for you:

• How does your working time divide among the quadrants?
• How does your organization’s time divide among the quadrants?

For myself, I spend too much time “below the line” in unimportant-land; my intellectual appetites tend to lead me toward what’s interesting, without regard to whether they move the needle. As for Quadrant II? Sheesh — maybe 15% of my time?

What about you?

At some point, I’m going to get around to writing up my thoughts on The Black Swan and Fooled By Randomness. For now, here’s a choice quote from an absorbing August 2008 Portfolio interview with their author, Nassim Nicholas Taleb:

Lloyd Grove of Portfolio: Are the people who are running our financial institutions capable of learning from their mistakes and fixing them?

Taleb: No, and this is the problem with incentives. A C.E.O.’s incentive is not to learn, because he’s not paid on real value. He’s paid on cosmetic value. So he’s paid to be nice to the Merrill Lynch analysts or the Wall Street analysts. So this is where the problem starts.

Read on.

BONUS: Bryan Appleyard’s excellent June 2008 feature on Taleb from The Sunday Times:

• Nassim Nicholas Taleb: the prophet of boom and doom

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