Sunday, December 14, 2008

Just say "Thank You"

Our mothers taught us always to use the magic words – “please” and “thank you.” They often couched the suggestion with various aphorisms like, “you attract more bees with honey than with vinegar.”

Tired and trite as such counsel may seem, the core truth is timeless and unchanged. Such behavior is important, even in business. A manager’s “please” and “thank you” carry much more meaning to employees than they do coming from a peer. That’s because people appreciate recognition, especially when it comes from those who may have the capacity to shape their future.

In the course of interviewing employees in a client organization a few years ago, we heard a story from people in the unionized manufacturing operation that underlines this point.

Late in the afternoon one day, a critical machine broke down, causing a shutdown of the entire production line. An early diagnosis determined it would keep the line down for at least 48 hours – maybe longer.
The maintenance team, consisting of about a half-dozen men, stayed past quitting time and dove in. In fact, they worked through the night and, by mid-morning the next day, had the machine up and running again. The projected 48 hours of downtime was cut to a mere 15.

Sure, these union machinists were on the clock. And, of course, they collected a hefty overtime bonus for their hard work. The union contract would have allowed them to quit after their requisite eight hours and return the next day at their usual starting time. But, as a team, they decided to work through the night and get the production line back up and running.

A few days later, after these men punched in one morning, their supervisor greeted them with a boxful of warm donuts, a pot of fresh coffee, a “thank you” for each, and a big smile. He paid for the coffee and donuts out of his own pocket. The smile and “thank yous” were free.

Seems like a simple gesture and an obvious one.

When one of these guys told us the story, he got emotional and a little choked up at the recollection. In fact, when I retell the story, so do I.


We heard that story about five times from different people, only one of whom was actually a member of the original crew that worked through the night. The story was so compelling, everyone we talked to seemed familiar with it.

Now, here’s the amazing part of my story…

We later learned that the actual event had taken place more than three years before we heard about it.

Small effort? Yes. Big impact? You bet.

When businesspeople talk about “reward and recognition,” it usually is in terms of formal systems, where people’s performance is measured on the fiscal year and they earn credits toward a reward: a gift card or something from the company store. Maybe they get their name in the company newsletter.

That’s all well and good, and I don’t discourage that kind of activity. But if that is the only way people are recognized for their hard work, the result will be a closely aligned set of behaviors within the margins of those pre-set determinants of desirable conduct.

Go ahead and do that, if you wish, but don’t overlook the far more important and meaningful kinds of reward and recognition… the simple ones, like:
• A big smile
• A pat on the back
• A “Thank you for your hard work”
• Impromptu team meetings to tell them that they’re doing a heckuva good job

In short, do the kinds of things you yourself would want to hear from your manager. You’ll be amazed at how well your words are received. Who knows? Maybe they’ll talk about it for years to come.

Monday, December 8, 2008

Communicate with your employees - Doctor’s orders

Business people are busy today – very busy. That has always been true, but more so now in the face of a distressed economy. Companies are struggling to maintain profitability, the components of which reside in every part of the organization – from maintaining good client/customer relations, to wringing maximum productivity and efficiency from production, to cutting expenses to the bone.

For the senior people, these pressures are compounded. They carry the weight of the company on their shoulders. You’re doing them a favor when you can relieve them of some of their burdens. So the suggestion that senior managers become better communicators is often met with incredulity and outright rejection.

Yet focusing a bit more on communicating with one’s employees can actually help bring some of the relief and support that is so critical in such trying times. A true story helps illustrate this.

A few years ago, a process industry company engaged us in an employee communications assignment. This company owned several large facilities around the world. The plant where my story takes place was quite large and consisted of multiple parallel processes, all doing pretty much the same thing round the clock. Like other such plants, a machine manager and his team of managers and supervisors run each component operation, covering the various facets of keeping that machine going.

The manager of one machine in this plant told me this story and I’ve never forgotten it.

He was in his mid-50s. One day, he went in for his annual check-up and his doctor told him that he needed to get more exercise, and suggested a long walk each day would be a good start.

This plant is built with the offices at one end, and an executive parking lot right outside. So this machine manager every day would walk about 50 or 100 feet between his car and his office. To follow his doctor’s orders, he decided instead to park his car at the opposite end of his plant, forcing himself to walk about a half-mile both morning and night. Aside from getting more exercise, he realized some unexpected but very important benefits.

He suddenly had a lot more daily interaction with the people working on his machine than ever before. Sometimes it was a simple wave or nod and a "good morning" or "good night." Other times, it was talking about the latest NFL football game or the coming hunting season.

The important thing is that he broke the ice. Over time, he also changed people’s perceptions of who he was and what he did. He became more human and more approachable in their eyes. And what happened eventually is that people increasingly felt comfortable coming to him on the floor with problems, ideas, insights and solutions. Though that hadn’t been his intention, he opened lines of communication that had never existed before, in turn building trust among the work force.

His machine was one of the older machines in the company, yet about a year after he began his daily walks through the plant, his operation’s performance rose markedly – so high in fact that it became the most productive and efficient operation in the company.

What happened? What role did communications play in making this production line suddenly so productive? I think you know the answer, or at least can guess.

As this manager told me, as his people came to feel more comfortable with him, they told him things about his equipment and operation that he hadn’t fully appreciated before. And when he engaged in a little give-and-take with these hands-on operators, they had ideas and insights that, as the guy in charge, he could and did act on.

Sitting in that remote office, buried in reports, emails and meetings, managers don’t get a lot of opportunity to get their hands dirty, so to speak, learning what makes their operations tick. So the lesson here is, create the opportunity. Get out and talk to people. Pretend your doctor told you do it. You may be surprised what you learn.

Tuesday, November 11, 2008

Reaching employees at the Super Bowl

When a marketer advertises during the Super Bowl, what kind of message is it sending to its internal audience, its employees?

This is an especially pertinent question in our current economic climate as businesses struggle with sinking revenues and profitability. Lay-offs at the larger companies – the kind that advertise during the Super Bowl – are becoming everyday news lately. And those that are not cutting staff are asking their employees to pinch pennies.

So when that same penny-pinching company spends millions of dollars on Super Bowl advertising – which this year will cost about $3 million for a 30-second spot – do employees resent it and see it as hypocritical, contrary to a climate of cost cutting? Perhaps. But there’s another angle to this. And while the decision to forego high profile advertising in the name of cost-savings may seem obvious, it really isn’t.

According to the Wall Street Journal (Nov. 11, 2008) this is a question that FedEx is wrestling with right now. The package-delivery giant has advertised in each of the past 12 Super Bowls and has reserved a slot for the 2009 game, as did a number of other advertisers. In fact, NBC’s inventory of ad spots was sold out in September – before the financial meltdown.

But FedEx has not confirmed its buy and, a spokesperson says, it is concerned that spending such an exorbitant amount of money when it’s “asking employees to do more with less” will not be received well. [Update: FedEx has decided not to advertise in the Super Bowl.]

I remember, years ago, a beautiful advertisement for Porsche in a number of glossy magazines. The ad featured a large double foldout with a schematic cut-away of the Porsche 911 and intricate airbrush graphics detailing all the unique engineering that makes a Porsche a Porsche.

At the time – when I was a neophyte in the marketing business – I doubted the very expensive advertisement sold many cars. But a wiser marketer explained it a different way. The ad wasn’t meant so much to sell new cars as it was to confirm to Porsche owners that they had made the right decision.

It gave owners a private little gloat, and made them proud of their decision – and their exceptional machine. It provided them more information about their cars than they had ever gotten, facts and details that underlined the thrill they experienced using the product.

In the same way, advertising a product or service in bad economic times may, on the surface, seem frivolous and wasteful, especially to the insiders who are having to deal with the effects of belt-tightening. And so a case can certainly be made for skipping the Super Bowl and putting those millions to better use inside the company and/or assuring continued customer support.

Yet, the opposite case can also be made. A high-profile Super Bowl ad, if done right, can send a message of strength, determination, conviction, and renewed faith in the firm’s future. It says “we’re in it for the long haul, come what may. We’re not going anywhere.”

That’s certainly an important message to the employees as they fight to keep the firm profitable and worry about their vulnerability in tough financial times. It can steel their resolve when they get a morale boost like that. Like the Porsche ad, it can seal the deal with the employees.

But make no mistake about it: it’s a delicate decision, one that needs to be thought out in the larger context of marketing goals and the company’s long-term strategic direction, just as does the tone of the advertisement. While the decision is often made by the chief marketing officer and his/her team, another voice ought to be heard in that process: the employee communications professionals.

Questions about the value of the highly visible advertisement in the context of the internal climate must be posed and considered in terms of, not only the ultimate decision of whether to advertise but how to advertise, the content, and the tone. The wise marketer will accommodate and honor that input. The company will be stronger for it, regardless of the ultimate decision.

Monday, October 27, 2008

Manage People’s Expectations in an Acquisition

Is the firm opening a Los Angeles office, one young copywriter wonders aloud. “I’d love to move to LA. Get myself a convertible.” No one knows for sure what is happening to their New York advertising agency, Sterling Cooper. But something surely is afoot as the partners remain huddled in the executive conference room.
      It turns out the firm is being acquired by a larger London ad agency, and all bets are off. “There’s definitely going to be some redundancies,” says a secretary. Everyone is panicked. Is their job “redundant?”
      An account manager lowers his voice conspiratorially: “Regime change is always tricky. You want to stay neutral. Loyalists are always hung and you don’t want to get caught in the fall-out.”
      Another adds, “They don’t care about us. We’re just a bunch of salaries on a ledger. They’ll draw a line and get rid of everything below it.”
      The traffic manager whines, “I like this company the way it is.”
      Sound familiar? Is it real life? No, but it may as well be. It’s a scene from the final episode of the second season of “Mad Men,” an original dramatic series on cable TV, from AMC. Placed in the early 1960s, it no doubt accurately reflects the fear that is felt among employees in an acquired firm.
      For dramatic effect, while the news of the merger is sifting through the Sterling Cooper organization, there is a very real fear overhanging the world due to the October 1962 Cuban missile crisis, which mirrors and exacerbates the angst of those in the firm and their uncertainties of the coming merger.
      This isn’t 1962 and times do change, but not in the realm of mergers and acquisitions and their effect on the people at ground level – the ones who aren’t reaping the profits that owners and partners do.
      Mergers and acquisitions foment uncertainty, dislocation, fear – and worse. Much of that - the natural human reaction to radical change - cannot be avoided. Changes that such events bring also spawn questions that cannot be answered right away. And when questions can’t be answered promptly, the rumor mill takes over.
      What can be managed, on the other hand, are people’s expectations, and insights into how decisions affecting their lives will be made, and when, as well as communicating why some questions will remain open for a time.
      In today’s business world, much of the value of an acquired firm resides in its people. The acquiring company buys brand names, patents, manufacturing facilities, equipment and the like, to be sure. But without the people, it is an empty shell. So it is incumbent on the senior managers to do all within their power to reassure the people and reinforce the company's core values so that the talent won’t make a beeline for the door the day the sale closes.
      At base, effective, relevant and timely communications will go far in achieving the core business purpose of the merger, which is to preserve and enhance the value of the acquired company by building trust and credibility among the new employees.
      Often, the danger lies in the early days before much is known and few of the big questions can be answered. The acquiring firm will often communicate reassuring words that “nothing (or little) will change” and that people should just keep doing what they’ve always done.
      But as the deal shakes out and the questions begin to find answers, the early general communications may be inadvertently contradicted. It can’t be helped. Much is discovered in the early “honeymoon” phase that hadn’t been anticipated, necessitating unplanned changes in plans.
      Change is like that. The key is to approach the employees and managers of the acquired firm with honesty and reassurance.
      The key messages stay simple, direct and honest:
  • We acquired your company because of the excellence it adds to ours. It would be unwise for us to do anything that diminishes or destroys that excellence.
  • Please work with us as we get to know one another better, as we learn how we will operate together going forward.
  • Help us discover your best practices and show us how they might benefit the new larger company.
  • Please understand that there will be stumbles along the way. We will always try to minimize the mistakes and hope that you will be stick with us through the rough patches.
  • By working together, by striving to achieve the best for our customers, our employees and our stockholders, we will all succeed together and the final product will be more than the sum of the two components.

Tuesday, October 7, 2008

Who is Joe Maddon?

Unless you’re a baseball fan, you probably don’t know the answer to that question. Even then, you may not. Joe Maddon is the manager of the Tampa Bay Rays, the surprise contender for baseball’s American League championship and, if they beat the Boston Red Sox, the World Series.

“Surprise” because, up until the 2008 season, the Tampa Bay team was the doormat of the league and had never come close to making it to the playoffs in its short 10 years of existence. All of a sudden in 2008, they tore up the competition and won American League East division title with pretty much the same collection of players as before.

And therein lies a lesson for managers in all lines of work.

One truth about managers in Major League Baseball is that the better ones are often those who were also mediocre players. Very few All-Star ball players go on to become superb managers when their playing careers are over. In fact, off the top of my head, I can’t name any in the modern era.

In other words, outstanding playing ability does not necessarily translate to superb managing skills.

The same is true in business. For instance, how many companies promote their best salespeople to sales managers, only to watch them fail? Unfortunately, it’s too common. Being a superstar salesman does not require the same skill set as being a good manager. Similarly, the ability to hit, throw and catch a baseball does not equate to the ability to manage highly talented and often temperamental people.

Joe Maddon – with a bit of a wise grandfather look about him – took on the top job at Tampa Bay prior to the 2006 season. Before that, he had done stints as a manager with an array of minor league teams, and served as bench coach for 10 years with the Los Angeles Angels. His unremarkable playing career included the Los Angeles Angels farm system for three seasons. He never made it to the big leagues before switching to scouting and then managing.

What makes a great manager like Maddon, one who can take a collection of 26 men and turn them into a contending team? Certainly at the top of the list is an appreciation for talent and the insights necessary to apply that talent correctly to quickly changing, evolving circumstances. One truth about baseball that I read a long time ago is that it is a game of suddenness: suddenly, anything can happen. The same is true in a business environment.

Also right up there is an organized mind, with a knack for making obtuse connections between disparate opportunities and challenges – e.g., the right players and the combination of batting order against a particular pitcher’s style.

But perhaps the most important skill is the ability to communicate effectively with a diverse group of professionals, many of whom in the Major Leagues have outsized egos.

And that’s the secret in business too - which is not to imply that business managers must deal with outsized egos, though they do on occasion. But they do have to contend with evolving situations and unforeseen challenges and opportunities, sometimes turning on a dime. And they must foster the forces and people under their control as best they see fit.

Establishing strong, trusting relationships with those upon whom he/she relies is critical. As has been noted previously in this space (see below, "Fair Weather Employees?"), the manager can’t wait until the crisis starts to begin building those relationships. That effort must begin their first day on the job.

Building trusting relationships with your team members requires superior listening skills, empathy, insight into team members’ relative strengths and weaknesses, along with an on-going desire to see those people improve and excel as individual contributors.

In that regard, I am reminded of the words of the late great sportswriter, Red Smith as he remembered his days at the old (and defunct) New York Herald-Tribune. Sports editor Stanley Woodward returned from World War 2 and set about building what was then and probably still is the best collection sportswriters ever.

“He was scouting for the best men he could get,” Smith recalled. “Stanley was the best department head, perhaps the best all-around newspaperman I’ve ever known. Some sports editors, especially if they write a column, are afraid of competition. They want to be the big man of the paper. But Stanley’s rule was, ‘I don’t want anyone who can’t out-write me.’

It’s a good philosophy for any manager: don’t be threatened by the superior talents of your own people; hire the best and cultivate them to become even better; and establish the kind of relationships where they wouldn’t want to work anywhere else.

Watch Joe Maddon in the coming week as his Rays take on the defending world champion Boston Red Sox. Watch how he manages his team, how he keeps his cool and counsels individual players quietly. I wish him the best of luck – but not too much, because I’m a Red Sox fan.

Friday, September 26, 2008

Dings in the Green Monster

Familiarity with our everyday reality sometimes blinds us to meaningful and critical nuances. It usually takes an outsider to sense, appreciate and bring to our attention that which may be as obvious as the nose on our face.

What got me thinking about this little truism is the Green Monster, the famous leftfield wall in the Boston Red Sox’s Fenway Park. Or, more precisely, how it once was shown to me.

The New England Sports Network (NESN) broadcasts virtually every Red Sox game, both at home and on the road. The exception is when ESPN or FOX decide a particular game’s import merits a national audience. While I prefer the commentary, humor and observations of the regular NESN announcers – Jerry Remy and Don Orsillo - one ESPN broadcast earlier this year opened my eyes to a wonderful little truth about the uniqueness of 96-year-old Fenway.


The most dominant feature of Fenway, as any baseball fan knows, is the “Green Monster,” the 37-foot wall that shortens leftfield to a mere 310 feet (Fenway’s centerfield “triangle” being 420 feet). It creates a nightmare for visiting leftfielders, unsure how to play a careening line drive that may hit the wall at various angles 10, 20 or 30 feet above their heads.


Never before that particular ESPN broadcast did I really appreciate the Green Monster. During a lull in the action, ESPN focused one of its cameras closely on the wall and suddenly it became apparent, as the announcer noted, that there were dozens upon dozens of dings, dents, and pockmarks in the green sheet metal sheathing – testimony to the years of line drives that produced hits, many of which spelled the difference between victory and loss. It gave me pause, and made me wonder which long-since-retired All Stars created which ding, dent and pockmark.
It conveyed a sense of history, like the still visible bullet holes in the exterior walls of the École Militaire that bear witness to the last firefight in Paris as it fell to the German army in June 1940.

It took an outsider to notice that little nuance, something that the local guys never mentioned. Sure, Remy and Orsillo are probably well aware of it. No doubt they can see the pockmarks in the wall every time they watch a line drive rebound fiercely off the wall. But they don't really see them. The dings are a fact of everyday life in Fenway and not worth a second thought, much less an NESN close-up or an exegesis about it.

What does that tell us about how we conduct business, or go about our daily lives?

Coming home from an exotic foreign vacation, we try to hang on to the newness of everything as we return to the banalities of everyday life. We promise ourselves that we’ll look at every familiar facet of our life with new eyes and fresh insight. But we can’t. It’s not human nature to be able to bend reality and pretend that everything old is new again.


We need to learn to listen to that other opinion, the unique insight – even though it may seem off-the-wall. It is that other insight, that unique way of looking at things that can open new vistas to our everyday world, whether it be the world of business or that of our personal lives.


Our own Green Monsters have become something so familiar to us that they cease being monsters at all. They become a toy, like the bobble head “Wally” dolls sold at Fenway, the faux team mascot, a cute, cuddly Sesame Street-like rip-off that neutralizes the otherwise scary concept of a monster. It is a monster that is easy to live with, easy to conceive, easy to ignore in the wallpaper that surrounds our lives.


If we can bring in the outsider’s view, or imbue ourselves with that view, we can see with new eyes the world with which we are so familiar. We can be tourists in our own land and gain new insights into how we operate in that context, better able to be honest with ourselves about our weaknesses and strengths, about the dings in our own Green Monsters.

Thursday, September 25, 2008

The Man Who Loved Typewriters

Don’t judge me harshly, please, and think that this is just a weak attempt to get off on the cheap here by clipping and pasting someone else’s writing as my own blog entry. But I couldn’t resist sharing this little gem, discovered and shared with me by my father, a loyal reader of this blog. (Thanks, Dad.)

It comes to us courtesy of that lively masterpiece of journalism, The Economist, the English news weekly that persists in that old-fashioned journalistic custom of publishing stories without bylines. Would that others emulated the practice, we might have far fewer hyper-inflated egos pontificating at us. (Remember how good Talk of the Town in The New Yorker used to be without bylines?)

That aside, I hope you will enjoy this beauty from the magazine’s September 18 edition that recalls a simpler era when writing without aid of pen or pencil required knowing the qwerty system and strong, nimble fingers.
As someone whose first jobs were in newspapers using manual typewriters, this story speaks to me.


Martin Tytell, a man who loved typewriters, died on September 11th, aged 94

ANYONE who had dealings with manual typewriters—the past tense, sadly, is necessary—knew that they were not mere machines. Eased heavily from the box, they would sit on the desk with an air of expectancy, like a concert grand once the lid is raised. On older models the keys, metal-rimmed with white inlay, invited the user to play forceful concertos on them, while the silvery type-bars rose and fell chittering and whispering from their beds. Such sounds once filled the offices of the world, and Martin Tytell’s life.

Everything about a manual was sensual and tactile, from the careful placing of paper round the platen (which might be plump and soft or hard and dry, and was, Mr Tytell said, a typewriter’s heart) to the clicking whirr of the winding knob, the slight high conferred by a new, wet, Mylar ribbon and the feeding of it, with inkier and inkier fingers, through the twin black guides by the spool. Typewriters asked for effort and energy. They repaid it, on a good day, with the triumphant repeated ping! of the carriage return and the blithe sweep of the lever that inched the paper upwards.

Typewriters knew things. Long before the word-processor actually stored information, many writers felt that their Remingtons, or Smith-Coronas, or Adlers contained the sum of their knowledge of eastern Europe, or the plot of their novel. A typewriter was a friend and collaborator whose sickness was catastrophe. To Mr Tytell, their last and most famous doctor and psychiatrist, typewriters also confessed their own histories. A notice on his door offered “Psychoanalysis for your typewriter, whether it’s frustrated, inhibited, schizoid, or what have you,” and he was as good as his word. He could draw from them, after a brief while of blue-eyed peering with screwdriver in hand, when they had left the factory, how they had been treated and with exactly what pressure their owner had hit the keys. He talked to them; and as, in his white coat, he visited the patients that lay in various states of dismemberment on the benches of his chock-full upstairs shop on Fulton Street, in Lower Manhattan, he was sure they chattered back.

A drawer of umlauts

His love affair had begun as a schoolboy, with an Underwood Five. It lay uncovered on a teacher’s desk, curved and sleek, the typebars modestly contained but the chrome lever gleaming. He took it gently apart, as far as he could fillet 3,200 pieces with his pocket tool, and each time attempted to get further. A repair man gave him lessons, until he was in demand all across New York. When he met his wife Pearl later, it was over typewriters. She wanted a Royal for her office; he persuaded her into a Remington, and then marriage. Pearl made another doctorly and expert presence in the shop, hovering behind the overflowing shelves where the convalescents slept in plastic shrouds.

Mr Tytell could customise typewriters in all kinds of ways. He re-engineered them for the war-disabled and for railway stations, taking ten cents in the slot. With a nifty solder-gun and his small engraving lathe he could make an American typewriter speak 145 different tongues, from Russian to Homeric Greek. An idle gear, picked up for 45 cents on Canal Street, allowed him to make reverse carriages for right-to-left Arabic and Hebrew. He managed hieroglyphs, musical notation and the first cursive font, for Mamie Eisenhower, who had tired of writing out White House invitations.

When his shop closed in 2001, after 65 years of business, it held a stock of 2m pieces of type. Tilde “n”s alone took up a whole shelf. The writer Ian Frazier, visiting once to have his Olympia cured of a flagging “e”, was taken into a dark nest of metal cabinets by torchlight. There he was proudly shown a drawer of umlauts.

Mr Tytell felt that he owed to typewriters not only his love and his earnings, but his life. In the second world war his knowledge of them had saved him from deploying with the marines. Instead he spent his war turning Siamese keyboards into 17 other Asian languages, or customising typewriters for future battlegrounds. His work sometimes incidentally informed him of military planning; but he kept quiet, and was rewarded in 1945 with a medal done up on a black, familiar ribbon.

Each typewriter was, to him, an individual. Its soul, he reminded Mr Frazier, did not come through a cable in the wall, but lay within. It also had distinguishing marks—that dimple on the platen, that sluggishness in the typebars, that particular wear on the “G”, or the “t”—that would be left, like a fingerprint, on paper. Much of Mr Tytell’s work over the years was to examine typewritten documents for the FBI and the police. Once shown a letter, he could find the culprit machine.

It was therefore ironic that his most famous achievement was to build a typewriter at the request of the defence lawyers for Alger Hiss, who was accused in 1948 of spying for the Soviet Union. His lawyers wanted to prove that typewriters could be made exactly alike, in order to frame someone. Mr Tytell spent two years on the job, replicating, down to the merest spot and flaw, the Hiss Woodstock N230099. In effect, he made a perfect clone of it. But it was no help to Hiss’s appeal; for Mr Tytell still could not account for his typewriter’s politics, or its dreams.

Monday, September 22, 2008

Maintaining a Sense of Urgency

Through good times and bad, through crises and times of change, businesses that thrive, grow and succeed are those best able to maintain a sense of urgency.

But just what does that mean, to maintain “a sense of urgency?”

Many people equate urgency to lots of tasks being done quickly and frantically. If you check your thesaurus, you won’t find that urgency, quickness and franticness are synonyms. Unfortunately, too many people buy into that myth. And that’s exactly the wrong approach when a business is contending with a crisis or profound change. While complacency is certainly the wrong way to respond to challenging circumstances, a false sense of urgency can often be more dangerous.

In his latest book, A Sense of Urgency, John P. Kotter ably explains the difference between the three responses and provides a very useful guide for businesspeople facing change, crises and challenges. Kotter, the Konosuke Matsushita Professor of Leadership Emeritus at Harvard Business School, has been lecturing and writing about leadership for years.

He has authored three outstanding books on the subject in the past decade, that have become invaluable for today’s business leaders: Leading Change, The Heart of Change and Our Iceberg is Melting. This latest book carries forward and develops the themes of the previous three while folding in and updating much of what he learned in the intervening years.

The essence of true urgency lies in doing the right things the right way. It is “ridding oneself of unproductive tasks that add little value to the organization but tend to clog managers’ calendars and impede necessary action.” It is not allowing subordinates to “delegate tasks up” to you. It is that and much more.

No doubt you’ve dealt with managers who appear to be operating with urgency. They run from meeting to meeting, always checking their BlackBerry, coming in early and leaving late. Perhaps you’ve even been guilty of false urgency. According to Kotter (and our own observations), managers like this tend not to get a lot accomplished, and rarely contribute to addressing the immediate crises.

Kotter defines complacent behavior as “unchanging activity that ignores the organization’s opportunities or hazards, focusing inward.” He says that a false sense of urgency is aimless, “frenetic behavior leading to exhaustion and stress.”

Complacency is built on a feeling that the status quo is basically fine. On the other hand, false urgency is built on a platform of anxiety and anger. By contrast, the true sense of urgency is action that is alert, fast moving, and focused externally on important issues.

That external focus is so important that Kotter devotes an entire chapter to it. In fact, bringing the outside world in is one of his four tactics to achieve urgency.

As noted, a complacent organization is one that is inwardly focused. He writes, “An inwardly focused organization inevitably misses new opportunities and hazards coming from competitors, customers, or changes in the regulatory environment. When you don’t see opportunities or hazards, your sense of urgency drops.”

Bringing the outside world in can take many forms, and Kotter cites a number of examples. For instance, bringing in the voice of the customers helps the organization become more cognizant of what it is doing right (and wrong), and how it might improve its products, services and customer support in ways that assure and improve customer loyalty.

The outside world, as Kotter notes, is a constantly changing beast, with new challenges always popping up. New technologies arise that could mean the death knell of your business or, conversely, make your business more valuable if those technologies are leveraged correctly.

An important component of urgency, which Kotter only obliquely mentions, is the central role of communications. Unfortunately, he falls into the usual trap of referring to organizational communications repeatedly in the context of a function performing various tasks. In fact, effective communications – both internally and externally – are implicit in truly urgent behavior, though he fails to say so.

Leaders and managers operating with urgency are very clear in their communications and keep their people in the loop. They engage regularly in lively discussion, dialogue and debate inside the company, and assure that the information they impart to the organization is both timely and relevant.

Despite Kotter’s oversight and his omission of that key point, it’s a fine book with some very important counsel for today’s manager.

Friday, September 12, 2008

"We?" or "They?"

Ever notice how fickle sports fans can be? Last Sunday, before the New England Patriots-Kansas City Chiefs game started, fans interviewed in the parking lots were saying, "We're going to win the Super Bowl this year!"

But something terrible happened during the game. In the first quarter, the Patriots’ star quarterback, Tom Brady, took a solid hit to his left knee, crumpled to the turf in pain and, as we would later learn, is out for the season with torn medial and anterior cruciate ligaments (MCL and ACL). After that, fans were heard saying, "I don't think they can win this year without Brady."

How quickly things change from “We” to “They.” It's not unique to New England, nor is it unique to sports. I guess it's just human nature to want to associate with winners but to distance ourselves from losers – even perceived losers.

The same is true within the corporate world. In a winning company, one that is on top of its game like Google or Apple, the employees typically talk about the company in the first person plural. "We own the market."

But when a company is struggling, it's often "They don't know what they're doing. They have driven this company into the ground." In those cases, employees assume no responsibility for the decline of the company. It’s someone else’s fault – namely, the CEO and/or the management team.

When clients engage me to assess their internal culture and the quality of their employee communications, I usually conduct numerous interviews and focus groups with managers and employees. I listen closely for that “we” and “they” – whether front-line employees use the first or third person plural in reference to their employers.

Frankly, in that I usually have been brought in to address perceived problems, it’s more often the latter, as in, “They tried that before and it didn’t work.” And, “they never listen to us,” etc. In cases where the companies are struggling, rarely do we hear statements like, “We’re having a tough time.”

It goes to my original point here. People, by nature like to be associated with winners, and tend to distance themselves from losers. But for a company facing difficult challenges, what is the tipping point between "We" and "They?” How can leaders create that sense of ownership that is so important through good times and bad?

While the answer to those questions is unique to each situation, the commonality to all is effective communications – which is to say, relevant information conveyed in a regular and timely manner via dialogue, discussion and debate among and between leadership, managers, supervisors and employees. Where that is the norm, the sense of ownership is far more prevalent than not. You are more likely to hear employees using “we” than “they.”

People might point to a successful organization and say that developing that sense of ownership in a winning environment is easy. But I push back and say, what’s the chicken and what’s the egg?

More likely, the organization is successful because the environment of dialogue, discussion and debate is well established. People at all levels have a voice in the operation and, at the same time, they have a clear understanding of the company’s vision and mission, as well as the strategies that are driving them in that direction. Course corrections in the face of competitive threats and a changing marketplace are communicated clearly and regularly. There is no such thing as a “fair weather” employee. There is little opportunity for disassociation to fester, even when the chips are down.

Of course, the professional football team metaphor is imperfect because the average fan is not an employee and has no personal stake in the outcome of team’s season – unless that fan bets on the team. For a going concern, the average employee indeed has a personal stake in the health and well being of his or her company: his or her livelihood.

So it behooves company leadership to assure that its employees stay engaged, fully comprehending how they contribute every day to the ongoing health of the business. Only then will they see that they share responsibility for its success or failure. Only then will they think of the company as their own, in the first person plural.

Monday, September 8, 2008

The Concertina of Life

One day last month, I perused my bookshelves looking for something to read for a trip I was about to take and landed on an old book I hadn’t read in years: "The Thousand Mile Summer," written in 1959 by Colin Fletcher.

Fletcher, a Welshman, fought with the Royal Marines in World War 2, and then traveled the world before settling permanently in the United States in 1956. He was the author of several outdoor books. His more noted titles were his second and third books, "The Man Who Walked Through Time," and "The Complete Walker" – the former a memoir of his hike that covered the length of the Grand Canyon below the rim; the latter a comprehensive guidebook for aspiring back country hikers. "The Complete Walker," updated four times, became the Bible for backpackers.

"The Thousand Mile Summer" concerns his hike up the spine of eastern California in 1958, from the Mexican border to Oregon - up the Colorado River, through the Mojave Desert, Death Valley, into the Sierras, and north. It took exactly six months to the day, from March 8 to September 8. And so, today marks the 50th anniversary of the walk's completion. At the book's end, as he reflects on the experience and how he had told the tale, he writes the following:

"There is a difference in shape between a journey as it happens and a journey as you remember it. At the time, there it is – day after roughly equal day. But when you look back afterward (and especially when you talk or write about it) memory pushes and pulls at time as if it were a concertina. The vivid moments expand, so that they stand out like cameos. The dull periods contract, until whole weeks become compressed into thin shims."

This paragraph really struck me. If you think more broadly about "journey" to imply the many experiences that comprise our lives, it makes perfect sense. We all do much the same. It's a wonderful metaphor, the idea of life’s memories as a concertina. The daily routines, with all their banalities, are compressed into the thin shims, while those joyful moments, sometimes so brief and fleeting, expand, stand out and over-shadow everything else.

The clever and creative among us are able to weave the pleasurable moments into larger-than-life events. Sometimes, we exaggerate some details while ignoring others. Indeed, a good storyteller, one who can entertain in relating personal experiences, is one who is able to play that concertina, expand the moments of joy and excitement to come alive and become something larger than they were.

Fletcher, who passed away last year at the age of 85, teaches us the importance of focus, of winnowing out that which is unimportant. His tale examined in wonderful detail the unusual people he met along the trail, the beautiful vistas of the eastern Sierras he witnessed, the harsh heat of Death Valley, and the like. Yet the last several hundred miles toward the Oregon border, his tale speeds to a conclusion, falling into the "thin shims" of his story. (He admits, “The last three weeks of the hike were dull.”)

I think of his words a lot lately, assessing how I might approach each new day, whether it will be a thin shim or whether I can make it stand out like a cameo. In the end, it is we who make those choices.

Tuesday, September 2, 2008

"Inside Steve's Brain"

Before someone points out the obvious… Yes, I am very intrigued by Steve Jobs and his chief creation, Apple Inc. For good reason. I have owned and used Apple computers since 1984. Since buying my first Macintosh in 1989, I’ve never used anything else and cannot imagine why I would ever buy a Windows-based machine.

Knowing my bias and interest, my friend and colleague, Gary Grates, alerted me to a new book last week he was certain I’d appreciate. He was right. The book is Inside Steve’s Brain,” by Leander Kahney, news editor for Wired.com.

The book is about the way Steve Jobs thinks, how he operates, how he built Apple, his successes (and mistakes), his stunning innovations, and his most unique approach to the world. But it’s a lot more than that. It is a business book full of valuable ideas and insights into one of the hottest companies of our time. In addition to all that the reader will learn implicitly, the book makes it easy by concluding each chapter with a helpful summary list of “Lessons from Steve.”

Jobs’ success is not a simple formula, and thus deserves a book-length exploration that a blog entry cannot fulfill. But here’s the crux. Steve Jobs finds the best people, attracts them and, once he has them on board, allows them the freedom to do their best work. At the same time, he demands perfection. He doesn’t suffer fools gladly. Known for his abrasiveness, Jobs bisects the world into "geniuses and bozos." He weeds out the bozos.

Collaboration is central to how Jobs operates. The book compares how Apple approaches product development versus the typical auto company. At Apple, the design, engineering, manufacturing and marketing teams work side-by-side throughout the development process so there is little chance of miscommunication. Not so at other companies:

…Jobs has said it’s like seeing a cool prototype car at a car show, but when the production model appears four years later, it sucks. “And you go, what happened? They had it! They had it in the palm of their hands! They grabbed defeat from the jaws of victory! … What happened was, the designers came up with this really great idea. Then they take it to the engineers and the engineers go, ‘Nah, we can’t do that. That’s impossible.’ And so it gets a lot worse. Then they take it to the manufacturing people and they go, ‘We can’t build that!’ And it gets a lot worse.”

Pixar, Jobs’ other baby, is discussed within the context of how he puts together teams of talented people and allows them to thrive. The book contrasts Pixar’s way of doing things to the typical Hollywood approach. Pixar, by the way, is not headquartered in the LA area but in Emeryville in the East Bay.

In Hollywood, every one is a free agent: directors, writers, actors, etc. The deal is pitched pulling together the various talent. As Kahney notes, the people are finally working together smoothly about the time the filming is wrapped up. Pixar operates on the opposite model.

At Pixar, the directors, screenwriters, and crew are all salaried employees with big stock option grants. Pixar’s movies may have different directors, but the same core team of writers, directors, and animators work on them all as company employees. In Hollywood, studios fund story ideas – the famous Hollywood pitch. Instead of funding pitches and story ideas, Pixar funds the career development of its employees… At the heart of the company’s “people investment” culture is Pixar University, an on-the-job training program that offers hundreds of courses in art, animation, and filmmaking. All of Pixar’s employees are encouraged to take classes in whatever they like, whether it’s relevant to their job or not.

It’s no surprise that Jobs has earned remarkable allegiance from his people. We can see the results for ourselves in the great products those people create and the sales of those products. I’d read before the sales statistics for the iPod, but the book reiterates them and they’re worth repeating here as a demonstration of the success of the Apple model.

According to analysts, the company is on track to sell 200 million units by the end of 2008, and 300 million by the end of next year. Some analysts think the iPod could sell 500 million units before the market is saturated – which would make the iPod a contender for the biggest consumer electronics hit of all time. The current record holder is the Sony Walkman, which sold 350 million units during its 15-year reign in the 1980s and early 90s. Incidentally, Kahney writes at length contrasting Apple and Sony and how they develop and market new products.

What I find most telling is Apple’s (and Jobs’) near-total focus on the customer experience (in contrast to companies like Sony). While most companies just make products, Apple’s approach reflects the title of a 2005 Forrester Research study: “Sell the digital experiences, not products,” which the book cites. Chapter 6, on Innovation, concludes with the following “Lessons from Steve.”

  • Don't lose sight of the customer: The [Macintosh] Cube bombed because it was built for designers, not customers.
  • Study the market and the industry: Jobs is constantly looking to see what new technologies are coming down the pike.
  • Don't consciously think about innovation: Systemizing innovation is like watching Michael Dell dance. Painful.
  • Concentrate on products: Products are the gravitational force that pulls it all together.
  • Remember that motives make a difference: Concentrate on great products, not becoming the biggest or the richest.
  • Steal: Be shameless about stealing other people's great ideas.
  • Connect: For Jobs, creativity is simply connecting things.
  • Study: Jobs is a keen student of art, design and architecture. He even runs around parking lots looking at Mercedes.
  • Be flexible: Jobs dropped a lot of long-cherished traditions that made Apple special - and kept it small.
  • Burn the boats: Jobs killed the most popular iPod [the Mini] to make room for a new thinner model. Burn the boats, and you must stand and fight.
  • Prototype: Even Apple's stores were developed like every other product... prototyped, edited, refined.
  • Ask customers: The popular Genius Bar idea came from customers.

If that’s not a formula for success, I’d like to see one that is.

Tuesday, August 26, 2008

Managing a Presidential campaign: Lessons for managers?

No doubt all business books that provide insights into effective management techniques have a few rules in common… things like the importance of decisiveness, keeping the strategic view, not allowing problems to fester, communicating effectively to both internal and external audiences, maintaining and encouraging loyalty, minimizing staff dysfunction and turnover. Things in that vein. These rules apply in spades to CEOs and, for that matter, the President of the United States.

In fact, the modern presidential campaign provides the kind of trials and pressures not unlike those faced by most CEOs. That includes managing massive budgets, creating and sustaining loyalty, selling a range of ideas to skeptical audiences, selecting and motivating quality senior managers, and developing trusting relationships with those top people.

In that context, then, it was revealing to read in the latest issue of Atlantic Monthly that Hillary Clinton apparently fell short in most of those areas. The only conclusion the reader can draw after reading the 6100-word article (“The Front Runner’s Fall,” by Joshua Green, Atlantic Monthly, Sept. 2008) is that Ms. Clinton apparently lacked core management skills as she made her run for the presidency. Reaching that conclusion leads to the follow-on: that she probably was not presidential timber.


At the same time, the parallel conclusion one might draw is that, in this day and age, candidates like John McCain and Barack Obama, in getting as far as they have, demonstrate those key management skills and both should be commended for that.


We may complain about the duration of these campaigns – going on more than 18 months now – but one thing is sure: they truly test the mettle of the candidates, putting them through some pretty rough paces.


Certainly, glad-handing voters in Bumsteer, Iowa, and Zipville, Ohio, is not the same as staring down Vladimir Putin or Mahmoud Ahmadinejad. And deciding whether to run an attack ad is not the same as the decision to go to war.


But this is a tough job en route to acquiring the world’s toughest. On many levels, the campaign is good preparation in that it demands the ability to:

  • Attract, build and retain the necessary talent pool to run a very complicated process under severe budget and time constraints
  • Develop and maintain the loyalty of hundreds of staffers
  • Create, staff and inspire at least 50 independent state organizations
  • Communicate your core messages clearly and effectively
  • And to do it all under the constant scrutiny of the modern news media
Those who do it well enough to get the nomination of their party certainly deserve our respect, regardless of how we may feel about their politics or their ability to govern.

So why did Hillary Clinton fall short? Pundits on both sides of the political spectrum long felt she had an honest shot at winning the Democratic nomination. Could her downfall have been her poor management skills, as evidenced in the Atlantic Monthly article?


Joshua Green sums up the dysfunction early in his story:

“Clinton ran on the basis of managerial competence – on her capacity, as she liked to put it, to ‘do the job from Day One.’ In fact, she never behaved like a chief executive, and her own staff proved to be her Achilles’ heel. What is clear from the internal documents is that Clinton’s loss derived not from any specific decision she made but rather from the preponderance of the many she did not make. Her hesitancy and habit of avoiding hard choices exacted a price that eventually sank her chances at the presidency.”

Green cites numerous cases where she hesitated, wouldn’t make a decision, or left it to others, including her husband, the former president. Former GE CEO Jack Welch always said that it isn’t the wrong decisions that hurt your business. It’s the ones you don’t make.

Mrs. Clinton also struggled with putting together an effective core team, one whose skills blended and complemented one another. There was a lot of backstabbing, backbiting, and second-guessing going on. Consequently, making a bad situation worse, there were no clear lines of authority, and Mrs. Clinton couldn’t or wouldn’t fill the gaps.

Therein lies an important lesson here for businesspeople – managers who must make decisions, hire and fire people, develop talent, sustain loyalty, all in the on-going challenge of running a successful business. People become managers and progress in the organization because they learn how to exercise these important traits, and then they get better as they progress in the organization.


Most businesses are structured in such a way that those who don’t progress in their management skills don’t climb the corporate ladder. We could say the same is true of our presidential campaigns.

Tuesday, August 19, 2008

Media still on Steve Jobs deathwatch

The media buzz persists as to the health of Apple CEO and creative driver, Steve Jobs, and who might be waiting in the wings to replace him. No word yet confirming that Jobs in fact is in ill health, but don’t let that dissuade the media from speculating and holding a morbid deathwatch. The current issue of Forbes (Sept. 1, “Life After Steve,” page 40) throws some names into the ring as potential successors.

Pardon my lack of enthusiasm, but despite my long-time admiration for the magazine, I think this story is off base.

Forbes cites two insiders and six outsiders, noting their respective “Pros” and “Cons.” Tim Cook, Apple’s COO, now runs the worldwide Mac business but, according to Forbes, “doesn’t score high on marketing flair and the vision thing.” The other insider is Ron Johnson, late of Target where he earned his marketing stripes (and, one would assume, the right to be cited in this brief piece). His “Con?” "He’s no software nerd.” Neither is Jobs, for that matter. Steve Jobs knows what he likes, and what he likes invariably is what his customers like. It seems to be working.

The Forbes list goes on, with senior execs from Dell, Nike, Lenovo, Nokia, P&G and Sony. All supposedly have the credentials to take over Apple. But at the same time, unsurprisingly, all seem to lack a common trait: none are Steve Jobs or his clone – as if that’s a prerequisite.

That’s where Forbes misses the point.

Let’s face it, when a superstar CEO passes from the scene, his/her successor is never a carbon copy. Nor does the new CEO carry forward in exactly the same way and direction as the former CEO. Despite the typically anxious market reaction around CEO succession, stockholders wouldn’t want it any other way. All the market really wants is a steady hand, guiding the company to continued growth and success. Stockholders hardly care how that happens. They want the hits (and profits) to keep rolling.

Jack Welch has always been quick to remind interviewers that Jeffrey Immelt is in charge of GE. Though he has had numerous opportunities to do so, Welch has never (publicly) second-guessed his successor. Fact is, if Welch were still running GE, it’s highly unlikely that he’d be doing the same thing he did when he handed over the reins to his handed-picked heir. That was seven years ago and there have been a lot changes in the competitive marketplace to drive necessary internal change at GE in the intervening years. For that matter, under Welch, GE never sat still for long.

Let the media speculate all they want. I’ll take the continuing public discussion as a firm message to the Apple board and Steve Jobs that they should be preparing a succession plan for the day when Jobs decides he wants to retire.

In the meantime, I’ll say a little prayer for Mr. Jobs’ continued good health, and raise a toast to a long, productive life for him.

Friday, August 15, 2008

Daily newspapers dying a slow death

In the “Dog Bites Man” category lately, we have the oft-reported news that American daily newspapers are struggling. That’s putting it mildly. Barely a week goes by without more bad news for the industry. Circulation is down for every daily paper in the country and advertising revenue is plunging. Newspapers’ classified advertising business is virtually dead, gone to Craig’s List. And consequently, staff are being laid off, features eliminated, column inches of editorial copy cut, broadsheets narrowed, and news bureaus closed.

So, what’s the latest news on the newspaper front this week?
  • USA Today is laying off 1000 employees.
  • The New York Times is increasing its newsstand price from $1.25 to $1.50.
  • The Tribune Company (which owns several dailies, including the Chicago Tribune and Los Angeles Times) reported a $4.5 billion second quarter loss – which is pretty remarkable when you consider that Sam Zell paid $8.2 billion last December to take the company private.

Perhaps the most shocking news is that Portland, Maine, may soon become the first major American city with no daily newspaper. The Portland Press Herald, a 146-year-old newspaper, may shut down.

Today’s Boston Globe reports that finances are so tight and losses so significant that the Press Herald has closed its Augusta bureau. That would be akin to the Chicago Tribune closing its Springfield bureau. The Globe reports that the Press Herald has had four rounds of layoffs in the last 12 months. The owner is looking in vain for a buyer and has said he may have no recourse but to “dismantle” the newspaper operation, according to court papers filed by the publisher. Of course, this may be mere bluster on the part of the paper’s owners, who are in a contract tussle with its unions. But don’t doubt that the death knell is imminent.

People in the Portland area, the Globe reports, are examining their feelings about the paper and its role in their lives. While we may or may not care for our local daily newspaper and its editorial prejudices, some of us cannot imagine starting our day without it.

Yes, I know all about the changing demographics; that fewer young adults read newspapers today than older generations. I know that many people in the all-important 18-35 age group get their news from the Internet and late night comedians like Jay Leno, Jon Stewart and David Letterman. Habits are changing rapidly, and it doesn’t look good for the newspaper industry.

I read four papers each weekday morning: The Wall Street Journal, New York Times, Boston Globe and Boston Herald. Each fills a unique role in my day because each covers the news a little differently with a distinct perspective. Were I to lose one or two of them, my day – and life – would change. My newspaper reading habits are already changing, thanks to the Internet. A laptop and WiFi enable me to read the newspapers in the morning and simultaneously surf the web to do deeper research or analysis of something I may have read in one of the papers, or to forward a story of interest to friend or colleague.

But if we are honest with ourselves, we have to conclude that we are seeing the final days of daily newspapers, as we know them. How soon and what becomes of them, no one can say for sure. The fact is, the comfort and familiarity we derive from the physical printed page is being supplanted by electronic news. And that’s where the big money is going.

In Boston, a new company was formed earlier this year that may be breaking new ground in the news business, playing a part in the move to replace newspapers. “Global News Enterprises” is the interim name of the new company that expects to launch a web site early next year dedicated exclusively to international news. It is now hiring correspondents around the world. It will have no physical output like newspapers but will be exclusively web-based.

The founder is Philip Balboni, who made his pile as founder of New England Cable News, a regional version of CNN that, after initial struggles following its 1992 founding, is now making a lot of money for Comcast, its owner. Just as he rode an early wave in the NECN venture, I’d put money on the ultimate success of this one, too.

The fact is, whether we know it or not, we are all adjusting and re-examining our relationship with the printed page. And the money is following – cautiously, but unalterably. Having started my career in newspapers, it saddens me to see them go, but it is, after all, reality.

Tuesday, August 12, 2008

The Exception that Proves the Rule

Our American Airlines flight left the gate at Boston on time. We landed in St. Louis when we were supposed to. We departed St. Louis on time, and arrived in San Diego right on the schedule. The flight attendants were courteous on both flights, even though the planes were full. Four days later, our flight to San Jose departed and arrived on time. Coming home with a connecting flight through DFW the next week was the same banal on-time performance, same considerate on-board service. Furthermore, our undamaged, checked baggage came around the carrousel within 15 minutes of landing back in Boston.

When do you think this happened? Twenty years ago? Ten years ago? Wrong. It was just last week. Is there a new attitude at the airlines, or did we just get lucky?

This kind of feat in 2008 is startling in contrast to what we’ve come to expect in air travel. The rule in modern commercial air travel is chaos, rudeness, arrogance, total lack of information, and maddening delays. The exception that proves the rule is the experience we had last week, instead of the other way around, as it should be and once was. I wish it weren’t so and that I could report otherwise. But I was just thankful we had the exceptional experience this time.

If you’re old enough to remember listening to your music on vinyl LP records, even now, when you listen to a CD or mpeg version of an old favorite, do you still flinch as you approach the point in the song where that annoying skip used to be? Do you expect it, but are pleasantly surprised when there is no skip?

Ditto with our airline experiences, especially if you’re old enough to remember the good old days when flying was kind of exciting, a pleasant adventure; when everybody wore nice clothes and were on their best behavior; when courtesy in the skies was a competitive advantage for airlines and when the business was, in fact, competitive.

Today, unfortunately, it’s the kind of adventure like hiking into unexplored territory, when you wonder when and where you’ll wind up and who or what is going to make your day miserable: TSA, the airline, the flight attendants, another passenger, the FAA, or the weather. So when the experience goes smoothly, you keep flinching, expecting things to go haywire any minute.

But as one who is quick to write letters of complaint, when my airline experience goes well, I think I owe it to the business to say so, even though I know it is the exception that proves the rule.

Tuesday, July 29, 2008

United thinks outside the (pasta) box

Sometimes, it's the counter-intuitive idea that hits the home run. But who'd have thought that a stodgy company like United Airlines would be the one to do it.

Like those of you who fly the legacy airlines with any regularity, I’ve grown weary of the poor service and, often, outright idiocy in the way airlines like United operate. I have my own list of pet peeves, which likely parallels yours. By now, our lists have become tedious in their retelling.

That’s why I found it refreshingly shocking to learn in today’s Wall Street Journal that United Airlines in late 2004 launched, as an experiment, “United p.s.,” a premium service (hence, the p.s.) on select domestic trans-continental flights (JFK-SFO and JFK-LAX). They converted half the cabins of some existing 757s (my least favorite airliner) to business and first class. Tickets cost as much as $3,235 round-trip for business class and $5,167 for first class. And guess what. The experiment has been a success. They’re making money on the new service – lots of money.
Here we are, in the midst of what some people say is a recession. Consumers are cutting back on discretionary spending. The word “staycation” has become a part of our summer 2008 lexicon, reflecting the fact that more people are opting to stay home for their vacations rather than pay $4 for a gallon gas, or squeeze their frames into ever-smaller airline seats on flights that have a less-than-even chance (sometimes worse odds) of departing or arriving on time.

In that context, airlines have been mothballing their older airliners, reducing the number of flights, laying off pilots and flight attendants and engaging in the fine art of saving every last dime. Then, along comes somebody at United with this counter-intuitive idea. Try to picture the planning session where that took place. Whoever came up with that idea and then managed to sell it to his or her bosses should get the award for "Bravest Manager of The Year."

That aside, there’s something deeper going on here. Remember the old one-pound can of coffee? If you’re still buying cans of Folgers or Maxwell House in your local supermarket, you’ll know that “one-pound” cans of coffee now contain 12 ounces. Last time I checked, one pound was 16 ounces. But the cans are the same size as before. There’s just less coffee in them – for the same price. And that’s the key.

Last week, my wife and I were cooking dinner and she asked me to boil a half-pound of spaghetti. Fool that I am, I figured that was about half the box, since boxes of pasta contain one pound. Wrong. When I drained the cooked pasta and put it in the bowl, it was obvious there wasn’t enough. Looking at the box, I discovered that, yes, the contents had been reduced by four ounces. Same old price, by the way.

In the same way, the airlines in the past few years have been gradually reducing the pitch (the space between the seats) in their planes, to the point of torture for anyone more than five and a half feet tall.

About two years ago, United came up with the nifty idea of charging extra for a little bit more knee room. And then, the aisle seats also started commanding a premium price. Next, they set aside the first few rows in economy class for an additional fee. Since there are few original ideas in the airline industry, all the other legacy airlines followed suit. Ditto on the brilliant idea to charge for checked baggage.

Be that as it may, what the airlines have been doing is the equivalent of the shrinking coffee can and pasta box. They continue to charge reasonable prices for air travel, reduce the number of flights, add rows of seats to their planes, and charge for stuff that used to be included in the ticket price, all in an effort to maximize what they call “butts in the seats” in their largely fruitless quest for profitability. What that has spawned is a lot of uncomfortable, cranky customers.

Maybe what United p.s. represents is a retro airline: just like the old days when it cost a lot of money to fly across the country, but by God, you did it in style.

Next up: a packaged goods company will go retro and bump up their price on a “one-pound” can of coffee or pasta that actually contains 16 ounces of product. And everyone else will follow suit. What a novel idea.

Saturday, July 26, 2008

Joe Nocera weighs in

Joe Nocera in today’s New York Times (July 26) pretty much echoes what I wrote earlier this week, with more information about Steve Jobs’ health than I could ever have learned. Of course, he has better sources and a full-time job that enables him the luxury of doing some serious digging. Note that one of his sources is none other than Jobs himself - albeit off the record.

Yet in nearly 1700 words, he doesn’t mention the succession issue, which I find odd. If Nocera is so concerned about Apple shareholders, whose interest in Jobs' health is a legitimate concern, you'd think he would castigate the board for being so slipshod in its fiduciary responsibility of developing a CEO succession strategy.

Bottom line: I find it encouraging, if we are to believe what Nocera writes about his off-the-record conversation with Jobs, that the cancer has not returned.

Anyway, it’s an interesting read for those of you following this story.


(Full disclosure department: I am an Apple shareholder. But I am also a long-time Apple and Macintosh devotee.)

Wednesday, July 23, 2008

Steve Jobs and the CEO succession issue

In its current jittery state, it doesn’t take much to send the stock market reeling. Nor does it take much to pull the rug out from under a single stock. Case in point, on the heels of a less-than-enthusiastic quarterly forecast, a rampant rumor (largely on Internet blogs) regarding the health of CEO Steve Jobs sent Apple stock tumbling in pre-market trading on July 22. At one point, it was down nearly 20 points (12 percent) before recovering much of the lost value in the afternoon.

Still, the speculation and price fluctuation drove two separate stories in the next day’s Wall Street Journal. The key issue, of course, is not so much Jobs’ health as the fact that Apple has no succession plan in place. And in the absence of such a plan, legitimate concerns about a CEO’s health can reek havoc with a company’s near-term prospects, especially in a volatile stock market.

Steve Jobs is an avid vegetarian and so usually does look pretty gaunt. But his 2004 bout with pancreatic cancer hasn’t been forgotten. Some people are now speculating that he's having a relapse. On July 21, Apple’s Chief Financial Officer Peter Oppenheimer declined to answer an analyst's question about Jobs' health, calling it “a private matter.” Fair enough, but that simple comment was probably the impetus behind all the subsequent buzz.

As CNET opined on the story in the midst of the July 22 stock price tumble, “there is no universal standard for how companies are expected to disclose the health issues of their executive officers, the way there are standards for how companies are required to disclose material financial information. Corporate-governance experts generally agree that a company's board of directors has the responsibility to determine whether the health of its CEO is affecting his or her ability to run the company. Likewise, CEOs have a responsibility to be honest and up-front with the board of directors over the true state of their health.”

This is an issue facing all public companies and, as the Journal points out, continues to be a concern for the Securities and Exchange Commission (SEC) – which to date has taken a mostly laissez faire attitude. The SEC to date seems to be saying that, so long as the board is kept informed and there is no unusual (i.e., suspicious) insider trading going on, then it's probably ok.

The current rumors at Apple, in fact, mirror something that I noticed a month ago when Apple rolled out the new iPhone 3G and iPhone 2.0 software at the Worldwide Developers' Conference in San Francisco in June. I've watched videos of several of his appearances, in their entirety, at MacWorld and such the past few years. One glaring difference last month was how he yielded the stage to other people – giving them more time than usual.

When Jobs and Apple introduced the first iPhone at MacWorld in January 2007, Eric Schmidt, Jerry Yang and Stan Sigman, CEOs of Google, Yahoo and Cingular, respectively, briefly took the stage in turn. But last month, two Apple senior executives took the microphone to discuss at length the new features of the iPhone 3G and the new software: Phil Schiller, senior VP for Worldwide Product Marketing, and Scott Forstall, senior VP for iPhone software. (Schillar, incidentally, is often cited among some bloggers as a possible successor to Jobs.) It's very unusual for Jobs to give the stage to any other Apple people. So it got me wondering then.

Nobody at Apple asked me, but if they did, my counsel would be two-fold:

Number one, in cases like this, silence is not golden. Better that Jobs be seen in public, looking hale and hearty (assuming that's the case), even if a bit underweight. I know he's a private guy, but if he cares for the near-term future of his company, it would be good for him to be seen a bit more than usual, for instance dropping in unannounced at a couple of Apple Stores, or offering himself up for selected one-on-one interviews, such as with Charlie Rose. Give the interviewer the chance to ask the health question. Then, answer it honestly.

On the other hand, if in fact he is suffering a relapse or some other unrelated health problem, then this counsel goes out the window. Silence would then be the best approach for the time being.

Secondly, regardless of Jobs' state of health, Apple’s board has been remiss in not addressing the succession issue long ago. This is a company - like Oracle and Dell - that is built around one man's genius and creativity. And it is in danger of losing its raison d'etre if it were to lose him suddenly. The board, then, should step up and develop a succession plan and be very public about it. Sure, Jobs is the heart of Apple and whenever he finally announces his retirement, for whatever reason, the stock will undoubtedly plunge. But a strong succession plan and successor will alleviate much of the damage.

All too often, boards are too passive on this subject. Cases in point: GM and Oracle. Who will succeed GM’s CEO Rick Wagoner? Hasn't he adequately demonstrated his inability to address the core challenges facing GM? Isn't it time for a fresh approach? And why can't Oracle’s Larry Ellison dampen his ego a bit to select a successor who will stick around long enough to actually succeed him?

In the opposite case, look at GE. Few people ever lost sleep over succession issues at GE. It's part of their culture to cultivate future leaders, and CEOs announce their coming retirement well ahead of time to help the board identify their successor. Apple would do well to emulate the GE model.