Archive for September, 2016
Posted by Tim Askew in Best Bosses, Blog, Corporate Rain, Entrepreneurship, Trees of Talent, tags: Alice Waters, Amazon, Bill Walsh, Brinker International, Chez Panisse, Corporate Rain International, Dartmouth, Dr. Sydney Finkelstein, Jeff Bezos, John Stewart, Larry Ellison, Lorne Michaels, Michael Milken, Miles Davis, NFL, Norman Brinker, Ralph Lauren, Roger Corman, San Francisco 49ers, Superbosses: How Exceptional Leaders Manage the Flow of Talent, Tuck School of Business
“Give me your wackos.” Those were Jeff Bezos’s reported instruction to his original executive search firm when starting Amazon.)
In his new book, Superbosses: How Exceptional Leaders Manage the Flow of Talent, Dr. Sydney Finkelstein doesn’t speak specifically about Jeff Bezos, but I suspect he would well understand and approve of Bezos’s sentiments. Finkelstein states,
“In any industry, superbosses seek out unusual qualities most bosses don’t even think about. Superbosses don’t want just the candidates whose skills enabled them to score high on some test; they want candidates whose abilities are so special, no one would think to test them. If a candidate seems to have what the superboss is after, he won’t hesitate to overrule human-resources specialists. The superboss‘ quest for superstars will override everything else.”
Sydney is the Roth Professor of Management and Director of the Tuck Executive Program at Dartmouth’s Tuck School of Business. His book Superbosses is a good read, though I do have a couple of cavils.
Finkelstein defines a superboss as “a leader who helps other people accomplish more than they ever thought possible.” They are leaders who delegate and place faith in their hires, even when the projects assigned are mission critical to their firms. They aggressively delegate meaningful and important work to their reports, their junior executives, and their employees. They know their hires will fail occasionally and they accept that. Furthermore, they create a nurturing cultural ambience that is supportive of managerial courage and thoughtful, creative risk. Superbosses put time into interaction with their employees–often working with them on the job and mentoring directly on projects, as well as giving direct feedback. They know their proteges first hand. He cites the old Reagan dictum: “Trust, but verify.” Finkelstein’s revision for superbosses is “Observe, coach, and trust. And then verify.”
The idea for Superbosses came out of Finkelstein’s avocation as a gourmet and foodie. He noticed that his friend Alice Waters, founder of Chez Panisse in Berkeley, California, seemed to generate an exceptionally large group of successful acolytes. He started to research this and found that, indeed, the people who worked for Waters, including sous chefs, waiters, bakers and even busboys, went on to enormous independent success as chef/entrepreneur/owners.
From there Sydney interviewed hundreds of business leaders over a ten year period, looking for those who personally and culturally generated what he calls “trees of talent.” He focuses on 18 of these business leaders. These really marvelous examples are of people like Larry Ellison, John Stewart, Lorne Michaels, Ralph Lauren, Michael Milken, Roger Corman, and even Miles Davis, to mention a few.
Two of my favorite models of Finkelstein’s superbosses are Norman Brinker of Brinker International and Bill Walsh, head coach of the San Francisco 49ers football team. Brinker was what Finkelstein calls a “hands on delegator.” He notes Brinker often would show up at his restaurants and bus tables with his employees He didn’t hesitate to share stories about his own mistakes and failures with his associates, helping create a fearless, through-branded culture. In the case of Bill Walsh, while he retired in 1989, the coaches trained by him still led 20 of the 32 teams in the NFL last year! Pretty amazing.
My favorite insight from Sydney is that the exceptional leaders he documents–leaders who create “trees of talent”–are confident enough to hire subordinates who are better than their bosses are. He says, “Superbosses take chances on people, and tolerate more churn if it means finding the right people later.”
I could not agree more. Though I do not consider myself a superboss, my own philosophy is to hire only people better than myself at my firm Corporate Rain International and turn ’em loose. Within the context of a deeply imbued service culture, I only want “bosses” working for me–bosses who can efficiently bring their best talents and full passion to their job without micromanagement. And that includes the receptionist. (If you want to read more on this subject, try my Inc. column of August 29, 2016. [“Why Giving Your Employees Autonomy is Crucial to Business Success”]
So bravo to Sydney Finkelstein. His book Superbosses is an impeccably researched, truly useful and actionable guide for leaders wanting to create “trees of talent.” While I do have a minor quibble or two (Sydney can be a bit didactically repetitive with some of his writing), this book offers an original, accessible, and learnable new way to approach HR and leadership development.
I like what Kevin Roberts, Executive Chairman of Saatich & Saatchi Worldwide, says on the back of Superbosses. To wit, “This book could make some bosses angry–and that’s a good thing. Finkelstein’s examination of what actually makes a legendary leader goes against the grain of much standard management ‘best practice’ and offers a whole new way to think about talent.” Well said, Kevin. Thank you.
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Posted by Tim Askew in Blog, Corporate Rain, Entrepreneurship, Ethical Culture, Profitability, Wells Fargo, tags: Adam Galinsky, Anita Roddick, Ayn Rand, Daniel Pink, Dr. Lisa Ordonez, Eller School of Management at the University of Arizona, Harvard Business Review, Inc., Marc Kodak, Maurice Schweitzer, Max Bozeman, Michael Douglas, New York University, Richard Cordray, The Body Shop, The Los Angeles Times, To Sell Is Human, U.S. Consumer Financial Protection Bureau, Volkswagen, Wall Street, Wall Street Journal, Wells Fargo Bank
Anita Roddick, the British founder of The Body Shop, once said, “Being good is good business.”
Did you see last Friday’s (September 9, 2016) Wall Street Journal? Well, it grabbed my attention. The page one, above-the-fold headline seemed simple enough. It read “Wells Fargo Fined For Sales Scam.” But what the article recounted was a cautionary tale about corporate culture, ethics, and business profitability.
Wells Fargo Bank was fined $185 million by the U.S. Consumer Financial Protection Bureau for “widespread illegal sales.” It opened no less than two million deposit and credit card accounts without customers’ knowledge, resulting in all kinds of extra fees for Wells’s customers and huge profits for the bank.
This is by far the largest fine in the CFBP’s five year history. In addition to the fine, Wells Fargo terminated roughly 5,300 employees for engaging in improper sales practices. The WSJ quotes CFPB Director Richard Cordray as saying, “Wells Fargo built an incentive compensation program that made it possible for its employees to pursue underhanded sales practices.” These unsavory, profit enhancing internal sales practices were nicknamed “sandbagging” and “bundling” by Wells employees.
How did this happen? Wells Fargo was the envy of the U.S. banking world. It consistently reported the highest profitability of all the major U.S. banks for a number of years.
The story is pretty clear. Wells Fargo had a long-term reputation for being a dependable, down-home, Main Street large bank. But executives and managers instituted a series of stretch goals and sales quotas after 2008 that were virtually impossible to reach. Wells didn’t seem to really care how their employees reached these goals, despite internal complaints.
It seemed to work for Wells. The bank bragged to the investor community of its unique ability to cross-sell products, claiming an average of six products per household through its “bundling” sales process. But, alas, its success was chimerical, based on a system that left its salespeople in the untenable position of only being able to meet their sales quotas through unethical, unfair, illegal, and fraudulent means. For the long-term this was very bad business.
The Los Angeles Times reports Wells employees frequently misused customers’ confidential information to open unauthorized accounts for customers, sticking them with bogus fees and unneeded services. Fearing retribution from managers, employees opened ghost accounts, forged customer signatures, and falsified phone numbers of angry customers so they couldn’t be reached for customer satisfaction surveys. Over 20 different services frequently were bundled illegally into new accounts or added to old ones—things like overdraft insurance or travel insurance.
All this has reaped a huge price in ongoing customer lawsuits and loss of reputation and good will for Wells Fargo.
This put me in mind of a prescient Harvard Business Review article from 2009 authored by Dr. Lisa Ordonez, Vice-Dean of the Eller School of Management at the University of Arizona (with colleagues Maurice Schweitzer, Adam Galinsky, and Max Bozeman) titled “Goals Gone Wild.” The two basic conclusions of her research were:
- Goals cannot create self-sustaining motivation.
- Goals cannot be the entire focus of management.
Unattached to an ethical corporate culture, systemic problems will predictably ensue. Problems like risk-taking, unethical behavior, decreased cooperation, and decreased intrinsic motivation. Daniel Pink’s recent book To Sell Is Human reached a similar conclusion.
Or note the recent compliance calamity at Volkswagen. Volkswagen set two demanding goals for its managers: to comply with mandated environmental standards and to become the largest car company in the world. This proved impossible. But rather than admit that, they decide to cheat massively and systemically by engineering their cars to fool the testers. (For more on this check out my Inc. column of June 13, 2016, “The Slippery Slope of Goals and Incentives.”)
In both the cases of Wells Fargo and and Volkswagen, the price for placing stretch goals and sales quotas above ethics and the law has been colossal. Ethics is surely not an optional “nice thing.” It is a crucial business tool for practical, long-term profitability.
We all know the famous phrase “Greed is good,” voiced by Michael Douglas in the movie Wall Street. Ayn Rand aside, just the opposite is actually true for long-term profitability: Good is greed.
Professor Marc Hodak of NYU puts it this way: “Incentive to perform is frequently indistinguishable from incentive to cheat.” Thank you, Marc Kodak.
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Posted by Tim Askew in Blog, Corporate Rain, Entrepreneurship, Incredibly Powerful Sales Tool No One Ever Uses Anymore, Sales, tags: Arthur Levitt, John Donne, Mark Twain, National Writing Project, Securities and Exchange Commission, Sharon Washington, To Sir Henry Wotton, US Post Office
Mark Twain once wrote a new acquaintance the following: “I didn’t have time to write a short letter, so I wrote you a long one instead.”
The topic today is that antediluvian museum piece, the personal business letter.
This quaint antiquarian form of business communication is a disappearing art form. It is in sad disrepute, condemned to ridicule and contumely by the go-go cutting edge of business. The idea of sending a personal letter is increasingly pooh-poohed (if considered at all) as an inefficient instrument of nostalgia and the past.
Let me be contrarian on this. It is my feeling that entrepreneurs increasingly are abandoning an important communication tool by dismissing the efficacy of the personal letter. Of course, entrepreneurs are not the only ones. The US Post Office is bankrupt because of a huge drop in letters of any kind (along with the innate lumbering inefficiencies of any government bureaucracy.)
Certainly, most small businessmen are uncommonly busy. Emailing, tweeting, and linking in are faster modes of communication. Yet I also believe there is a certain emotional laziness to going too quickly to reaching out just through these insta-presto mediums.
It is a personal thing writing a good business letter. It is a warm medium and can connect people on a more emotional level. Even a simple one line personal thank you note does this. But there are several reasons business folk are quick to abandon it.
- Let’s face it. Most businessmen don’t write very well. Arthur Levitt, past Chairman of the Securities and Exchange Commission and Bloomberg, has been on a jihad to bring good English back to business. He says much of business writing is cold, shallow, and, often, lacks nuance and color. It is boring to read.
- A good letter requires energy to write with compelling sincerity. A compelling letter means being open and vulnerable and personal, to some extent, to your correspondee—even in a sales letter. While most entrepreneurs are passionate, the business intimacy innate in the process is usually not comfortable or the strong suit for business people.
- Writing isn’t taught or remediated in business school. Sharon Washington, Executive Director of the National Writing Project, says our high schools and undergraduate programs have de-emphasized writing and constant digital communication has eroded basic writing and vocabulary skills. (LOL, OMG, WTF, BRB, etc.) U understand?
So why should the entrepreneur write more personal letters, especially in the sales process?
Well, I’ll tell you why. It’s simply because, since people don’t send letters any more, when you get one you notice it and actually read it. It shows personal attention and a service orientation in the midst of an increasingly impersonal society. (Quick Hint From Heloise—To make your letter have the best impact, use a very high quality of stationary or card.)
As John Donne put it to Sir Henry Wotton (1633), “Sir, more than kisses, letters mingle souls.” Thank you, John.
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