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Volume 6, Issue 7      In This Issue:   Companies that love their customers   The great CEO exodus   Global warming: Here come the lawyers   The $100 million CEO club   Google’s simple life   My big break   What it takes to be great   How one CEO learned to fly   Are today’s CEOs batting a thousand?   Best Bosses   Six steps to jumpstart your product and marketing strategy   Surviving success: When founders must go   The power of ordinary practices   Negotiating in three dimensions   Protecting your assets   Fit to be CEO   Executive health   Your job or your life   Road warrior health hazards   Not so routine physicals   To tell or not to tell   What if you only had 100 days to live   A wealth of trouble Companies That Love Their Customers The winners of Fast Company's 2006 Customers First Awards transform ordinary transactions into entertaining experiences -- delighting customers and showing everyone else the way. This special online section builds on Fast Company's September 2006 cover story on the winners with more winners and lots of multimedia. Find out who else we think is worthy of a mention, hear directly from some of the winners in podcast interviews, and take a look through our slideshows. And let us know what you think about customer service. For the first time, Fastcompany.com has built a special database to capture your votes and your experiences. Scroll down for the Customers First rating and commenting tool and weigh in on companies and their customer service. Browse through the ones we've included or add a new listing of your own... Read the article.  Back to top The Great CEO Exodus An impatient Street and stepped-up oversight have CEO turnover in overdrive. Will business suffer? When the doors slid open at the end of Tom Freston's final ride down the elevator at Viacom Inc.'s (VIA) Times Square headquarters, it was to a lobby jammed with nearly 2,000 employees. They gave him a teary ovation, shouting "Tom! Tom! Tom!" A heartwarming show of support, all right, but love and admiration from the rank and file didn't prevent the 26-year veteran from getting fired three days earlier. Sumner M. Redstone, Viacom's chairman and largest shareholder, had been unhappy with the lagging stock price and decided Freston wasn't moving fast enough to turn things around. Freston was in the job for just eight months. His tenure may have been especially brief and the details of his ouster peculiar to his situation, but Freston's story is becoming all too familiar. Already this year, 1,112 chief executives have left the corner office, both voluntarily and not. CEO turnover, in fact, is on pace to exceed last year's record 1,322 exits, according to Chicago consulting firm Challenger, Gray & Christmas Inc. The departures so far in 2006 include the honchos of some of America's best-known companies:... Read the article.  Back to top Global Warming: Here Come The Lawyers It's the next wave of litigation -- after tobacco, guns, and junk food. Why Detroit, Big Oil, and utilities should worry. Two days after hurricane Katrina smashed into the Gulf Coast, F. Gerald Maples returned to his hometown of Pass Christian, Miss., to utter devastation. Most of his neighbors' houses were totally destroyed. His was in ruins. "It broke our hearts and absolutely changed our lives," he says. It also made Maples, a veteran asbestos plaintiffs' attorney in New Orleans, determined to fight back. "I couldn't stand by when my entire cultural history was destroyed by an event that could become more frequent because of global warming," he says. So when friend and fellow trial lawyer Timothy W. Porter showed up to help with food and water, the two plotted a legal assault. Since Katrina's fury was powered by unusually warm Gulf water, and since such warmth could result from global warming, companies that have pumped the atmosphere full of greenhouse gases like carbon dioxide should be liable for damages, they figured. "To me, Katrina was a clear result of irresponsible behavior by the carbon-emissions corporate economy," says Maples. He recruited suddenly homeless neighbors like Ned Comer and filed a class action on their behalf in federal court in Gulfport, Miss. The defendants? Dozens of oil companies, utilities, and coal producers, from Chevron and Exxon Mobil (XOM) to American Electric Power (AEP) and Xcel Energy (XEL). "This is a heartfelt effort," Maples says. "I don't want to leave this global warming mess to my children." Neither, apparently, do a host of other lawyers... Read the article.  Back to top The $100 Million CEO Club Executives have been doing a lot of complaining lately. Dealing with the Sarbanes-Oxley Act is too stressful, shareholders are too aggressive and boards no longer tolerate minor ethical lapses. It's a hard-knock life--but, hey, the money's good. Very good. More than 30 CEOs have fully vested stock options worth $100 million or more. The main reason: Until 2004, companies didn't have to treat options as an expense, so they could lavish them on executives without hurting earnings per share. Some companies didn't even realize how big the honey pot would grow if they kept doling out options. "It's only recently that a few companies have started to calculate what the potential value of stock options could be... Read the article.  Back to top Google's Simple Life Google has a daring idea for the tech world: make things easy for customers to use. And oh yes, it also wants to control more and more of the advertising world. The search giant spent Wednesday and Thursday hosting one of its "Zeitgeist" conferences, this one pitched directly at the ad business. And while most of the event was off-limits to the press--mum's the word on which luminaries were spotted coming and going from the Googleplex--Chief Executive Eric Schmidt and co-founders Larry Page and Sergey Brin emerged Thursday afternoon to summarize the big concepts they'd been kicking around with their guests. Over the past several months, Page and Brin have battled to make Google's (nasdaq: GOOG) burgeoning range of products and features easier to learn and use, and likewise simplify the staggeringly complex computer architecture behind Google. Brin works the consumer-facing side, while Page handles the architecture behind it. Down the road, they said, Google will also have an easy to use tool for advertisers to easily place ads on radio, newspapers, magazines, online video and Web pages. "One thing that has to happen [in technology] is simplicity,” said Brin. “I don’t think I can use technology. ... It’s too complex for everything. ”As a result, Google has whittled down... Read the article.  Back to top My Big Break Sometimes it’s by design; sometimes it’s just a stroke of dumb luck. But in everyone’s career, there is bound to be a moment or decision that will alter the course of their professional lives. When they look back, they’ll remember and identify that moment as “My Big Break.” We asked the founders and chief execs of 10 leading companies--including Chrysler, Wipro, Best Buy and Palm-- to tell us about the most crucial moments in their careers. What we learned about their individual stories surprised, humored and occasionally touched us. We think you’ll get a lot out of each of the stories told by the business leaders profiled in this debut edition of “My Big Break.”... Read the article.  Back to top What it takes to be great Research now shows that the lack of natural talent is irrelevant to great success. The secret? Painful and demanding practice and hard work. What makes Tiger Woods great? What made Berkshire Hathaway Chairman Warren Buffett the world's premier investor? We think we know: Each was a natural who came into the world with a gift for doing exactly what he ended up doing. As Buffett told Fortune not long ago, he was "wired at birth to allocate capital." It's a one-in-a-million thing. You've got it - or you don't. Well, folks, it's not so simple. For one thing, you do not possess a natural gift for a certain job, because targeted natural gifts don't exist. (Sorry, Warren.) You are not a born CEO or investor or chess grandmaster. You will achieve greatness only through an enormous amount of hard work over many years. And not just any hard work, but work of a particular type that's demanding and painful. Buffett, for instance, is famed for his discipline and the hours he spends studying financial statements of potential investment targets. The good news is that your lack of a natural gift is irrelevant - talent has little or nothing to do with greatness. You can make yourself into any number of things, and you can even make yourself great. Scientific experts are producing remarkably consistent findings across a wide array of fields. Understand that talent doesn't mean intelligence, motivation or personality traits. It's an innate ability to do some specific activity especially well. British-based researchers Michael J. Howe, Jane W. Davidson and John A. Sluboda conclude in an extensive study, "The evidence we have surveyed ... does not support the [notion that] excelling is a consequence of possessing innate gifts."... Read the article.  Back to top How one CEO learned to fly McNerney: "I'm unafraid to expect a fair amount from people. It makes them so much better." Boeing chief James McNerney has now made his mark at three major companies. How? "Help others get better," he says. It's tough to find an executive who has delivered top performance across as wide a swath of business as Boeing CEO W. James McNerney. In a 19-year career at General Electric, he ran GE's Asian operations, its light bulb business and its jet engine business, among others - performing so well that he was a finalist to succeed CEO Jack Welch in late 2000. When he didn't get that job, 3M recruited him almost instantly to be CEO; the stock rose 34 percent on his watch. He left 3M to become Boeing's chief in mid-2005, and since then the stock is up 30 percent. McNerney, 57, spoke recently with Fortune's Geoffrey Colvin about the importance of his father and Jack Welch, how he helps people who work for him grow, why he admires Steve Jobs and much else... Read the article.  Back to top Are today's CEOs batting a thousand? Earnings can be misleading, and stock prices are too hyperactive. So what's the best way to measure executive performance? Just what makes a CEO great? Is it the ability to inspire the troops with bold visions of future growth? (You know, like Jeff Bezos at Amazon back in the day.) Or is it the resolve to cut ruthlessly away at divisions and people that aren't performing? (Like Jack Welch in the 1980s at General Electric.) Perhaps it's the financial acumen to see which measures of performance truly matter. (Alfred P. Sloan at GM, or Roberto Goizueta at Coca-Cola.) Then again, maybe it's the ability to know when to ignore financial measures to define what's really special about a company. (Steve Jobs in his second coming at Apple.). Is it the discipline to shun empire building and instead focus on making your core business great? (Katharine Graham at the Washington Post Co. in the 1970s.) Or the vision to move into a new business with greater growth potential? (Katharine Graham again, buying test-prep pioneer Kaplan in 1984.) No, no, here's what it is:... Read the article.  Back to top Best Bosses Five leaders who use innovative strategies and rewards to motivate employees. You can offer all the benefits in the world, but the one that matters most to employees is a piece of the action. Of the 18 honorees in Winning Workplaces' fourth annual Best Bosses competition, 14 run companies partly or completely worker-owned. That reflects a broader trend. The National Center for Employee Ownership estimates that 9,225 companies were offering stock-option plans, stock bonus plans, and profit-sharing plans as of July, up from 7,600 in 1999. Winning Workplaces is a nonprofit in Evanston, Ill., that helps small-business managers improve their communication skills to make workers more productive and happier. It assembled a team of respected judges, who culled the 80 applicants by looking at factors such as employee satisfaction ratings and by interviewing workers. The result? Eighteen Best Bosses - 17 from commercial companies and one from a nonprofit. From companies that offer free gourmet dinners during crunch times to a boss who lends top performers the keys to his convertible... Read the article.  Back to top Six Steps to Jumpstart Your Product and Marketing Strategy Are you ready to transition a product into new markets or define next generations of a solution? Knowing in which direction to take your product and marketing strategy can be difficult to determine, taking many months and using significant resources. But by taking the following six steps you can jumpstart your strategy-planning efforts with a streamlined and effective approach in developing a targeted product and market strategy... Read the article.  Back to top Surviving Success: When Founders Must Go When does a company founder have to go? In the frenzied, early months of a new venture's launch, few entrepreneurs anticipate a future beyond their role as company leader. In the case study "Founder–CEO Succession at Wily Technology," HBS assistant professor Noam Wasserman and former HBS entrepreneur-in-residence Henry McCance (MBA '66) focus on events surrounding the key moment at which a founder hands off his or her "baby" to a new CEO. "In my initial research on founders, I focused on the question of compensation and issues around building a board," says Wasserman. "After interviewing seven or eight founders, I was struck by the fact that a far more critical moment in a founder's life is when that person is told he can no longer lead the company he started." With the help of McCance, chairman of the venture-capital firm Greylock Partners, Wasserman identified Wily Technology founder Lew Cirne as the ideal case subject. "An inherent paradox in succession is that a founder who has been doing a good job actually increases the chance he or she will be fired," observes Wasserman. "Lew fit that profile perfectly." After developing Wily's technology, landing some important sales, and leading a strategic transformation of the company, David Strohm (MBA '80), a VC advisor on Wily's board, requested that Cirne step down to CTO and clear the way for an executive with the expertise to lead the company in its next stage of development. After the initial shock, Cirne... Read the article.  Back to top The Power of Ordinary Practices “My guess is that a lot of leaders have very little sense of the impact that they have.” Teresa Amabile is the Edsel Bryant Ford Professor of Business Administration at Harvard Business School. Teresa M. Amabile's research centers on how the work environment can influence the motivation, creativity, and performance of individuals and teams. A recent study focused on the influence of team leaders on these factors. Professor Amabile and New Business publisher Mike Roberts recently discussed her research: “I believe it's important for leaders to understand the power of ordinary practices. Seemingly ordinary, trivial, mundane, day-by-day things that leaders do and say can have an enormous impact. My guess is that a lot of leaders have very little sense of the impact that they have. That's particularly true of the negative behaviors. I don't think that the ineffective team leaders we studied meant to anger or deflate the people who were working for them. They were trying to do a good job of leading their teams, but lacked an effective model for how to behave.”... Read the article.  Back to top Negotiating in Three Dimensions “Negotiators sometimes can discover hidden sources of value and then craft agreements to unlock that value and overcome barriers created by poor deal design” Tactics, deal design, and set-up are three crucial components of the most effective negotiations. Yet many negotiators focus only on the tactical part, running the risk of undermining their own best interests. How can you negotiate more skillfully and confidently with clients, partners, and adversaries as well as with colleagues within your organization? In this Q&A, James Sebenius and David Lax, authors of 3-D Negotiation: Powerful Tools to Change the Game in Your Most Important Deals, discuss the common mistakes of negotiators, the power of a three-dimensional approach, why negotiating is an essential skill, and where the science of negotiation is headed. Negotiation is a core competence for life, "not merely an important skill to be wheeled out for special occasions," they argue. James K. Sebenius is the Gordon Donaldson Professor of Business Administration at Harvard Business School and a principal of Lax Sebenius LLC, a negotiation strategy firm. He also serves on the Executive Committee of the Program on Negotiation at Harvard Law School. David A. Lax, a former faculty member at Harvard Business School and investment banker, is now principal of Lax Sebenius LLC... Read the article.  Back to top Protecting Your Assets In “Divorce in the Workplace” (June 2006), we described Jack Welch’s woes and Gary Wendt’s folly in their divorce situations, coterminous affairs and financial settlements. We strongly recommended a prenuptial agreement in order to protect the depletion of the executives’ assets. Many executives marry long before they accumulate wealth and do not have such an agreement. Obtaining a postnuptial agreement is very difficult both financially and emotionally. The article generated a number of questions concerning how to protect your assets, which this article will discuss. Prenuptial agreements remain the most effective tool in protecting one’s assets, and the Paul McCartney- Heather Mills divorce will accentuate that point. The singer was offered a prenuptial by his wife, which he declined. He is reported to have $15 billion in assets, and under British law as opposed to U.S. law, his wife is entitled to exactly one-half or $7.5 billion. As described in the Wendt decision, the judge applying U.S. law has pointed out that equitable distribution does not mean equal, but he still awarded $20 million to Wendt’s wife in hard assets. Protecting your assets is required not only because of divorce but under the Sarbanes-Oxley Act, civil awards against CEOs can be quite large. Here’s are some ways to protect your assets:... Read the article.  Back to top Fit To Be CEO I was in Hawaii giving a speech for the leadership of Washington Mutual Bank. As is usual in my case, after the speech I went to the fitness center for my daily aerobic exercise. To my surprise, working out next to me on a treadmill was Kerry Killinger, CEO of Washington Mutual. I asked him if he maintained a fitness routine and he answered by asking, “How could anyone working in the speed and stress atmosphere of today, especially directors of companies, survive without fitness? It’s the best answer for combating stress and producing energy,” which he has a lot of. Pat O’Donnell is CEO of Aspen Skiing Company not just because of the prestige and money involved (although they’re nice), but because he has to have a job where he can live a vigorous and healthy lifestyle. When I interviewed him for my book, CatchFire, his habit was to start most mornings in the fitness center at the Snowmass Club. One of the most unexpected effects of his early morning workouts, he told me, was the innovative and creative ideas he got while working out. “That’s when I do a lot of my thinking. As a matter of fact, it’s almost ridiculous now because I take a little notepad from station to station. I usually walk out with six or seven new ideas every morning.” Lara Merriken, CEO of Coloradobased Humm Foods, also finds inspiration in her fitness routine... Read the article.  Back to top Executive Health Board meetings, conference calls, project reports and cross-country flights. We know. For many top executives, the typical workday starts at dawn and goes well past dusk. Finding time to spend with the family is never easy. Often, exercise and eating right are the first things to be sacrificed to the daily grind. Seeing a doctor? Unfortunately, time constraints and procrastination mean medical attention is more likely to happen in an emergency room than at a routine physical. In this Special Report, we look at new ways to stay fit, and we offer advice on finding more time with your family. More important, we show you how you can do all that and still keep your career on track... Read the article.  Back to top Your Job Or Your Life The Executive Balancing Act Leadership and management expert Kevin Cashman answers your questions on the C-suite's holy grail: work/life balance It's a good thing Dr. William Evans isn't afraid of needles. When he was diagnosed with Type 1 diabetes in 1989, he had to inject himself with insulin morning and night, and once before every meal. At business dinners, he would discreetly take a syringe out of his pocket and inject it into his stomach--without leaving the table. "You end up getting blood on a few shirts," says Evans, 56, CEO of St. Jude Children's Research Hospital in Memphis. Executives like Evans face a special set of issues when they are diagnosed with serious or chronic diseases. Some try to keep their conditions under wraps for fear of being perceived as weak or vulnerable. Others simply want to keep their illnesses a private, family matter. But no matter how private or public a CEO or top boss is, managing a chronic condition makes balancing work and family a veritable high-wire act. And while they may have the money for top-notch treatment, many can't find the time to take care of themselves. Fortunately for Evans, he can afford the time and is able to buy all the latest diabetes-related gadgets. He wears a sensor the size of a pager that warns him if his glucose level is getting too high or too low. Instead of carrying a syringe, he now wears a discreet pump that delivers the exact amount of insulin he needs… [Alan Fraser, CEO of Astoria Software in San Mateo, Calif., has had cancer three times ]... Read the article.  Back to top Road Warrior Health Hazards Executive Travel Tips Executive Health Tips As an engineer, Howard Lance liked analyzing data. But after he turned 50 last year, he realized he was becoming a statistic. Now CEO of defense contractor Harris, Lance was overweight most of his adult life. As the clock ticked onward, his blood pressure and cholesterol level also ticked upward. It was an alarming trend, especially since Lance’s father had suffered a heart attack at 55 and died a decade later. In June, with the help of his wife, Lance decided to make a change. "Like most executives, I always used the fact that I traveled, and was very busy, and ate out a lot, as my excuse for not being particularly healthy," Lance says. "But I found that I just needed to apply the same kind of discipline in my eating and exercise habits as I do in m y business." Easier said than done... Read the article.  Back to top Not So Routine Physicals In Pictures: Executive Health Centers Executives can choose to complete their health evaluations in one day at Cleveland Clinic or opt for... Kathleen Mason has left many unhappy doctors in her wake. For the chief executive of the Dallas-based discount chain Tuesday Morning, scheduling time to eat lunch is a challenge. Making separate appointments for a routine physical, eye exam or meeting with a nutritionist is virtually impossible. As a result, she's canceled a lot of doctor’s appointments over the years. What Mason says she needed was a one-stop health care solution that understood an executive’s time constraints. She’s found exactly that at... Read the article.  Back to top To Tell Or Not To Tell In Pictures: Managing Health Scares In June 2002, Dunn stepped down from her post as CEO of Barclays Global Investors... It's probably a board member's worst nightmare: The company's CEO suddenly falls ill or dies, and no one can find the succession plan. That's what happened last June, when Frank Lanza, the chairman and CEO of defense contractor L-3 Communications (nyse: LLL), died at age 74. His death was "sudden and unexpected," the company said in a statement. And the board clearly hadn't prepared for it. Lanza had told shareholders that... Read the article.  Back to top What If You Had Only 100 Days To Live? It’s a universal fact of life: All living things eventually die. But the ability to contemplate, anticipate and prepare for death is uniquely human. And it’s often through contemplating death that we realize what is--and isn’t--important in life. Those who have faced death themselves often say in retrospect it was the best thing that could’ve happened, because it caused them to reassess their lives and priorities. “Any life-threatening disease is a huge wake-up call,” says Sue Brush, senior vice president of Westin Hotels & Resorts, who struggled with her own mortality three years ago after a diagnosis of breast cancer. Ironically, she feels life is better because of it. “My doctor told me I would have a roller-coaster year, but that I would also get through it,” she recalls. “That part was right, I did get through it, but I will never forget it. I try to consequently live my life more fully as a result.”For Brush, living more fully has less to do with packing more in and more to do with letting go of... Read the article.  Back to top A Wealth Of Trouble Obesity is as much an economic phenomenon as a medical one. Great girth, for example, was long considered a sign of great wealth. There was a reason high-powered executives were once called "fat cats." To fight the battle of the wealth-induced bulge, a proper weight loss regimen may need an economic solution: The Financially Leveraged Asset for Bariatric Incentives. It's something I like to call, FLABI. A few decades back, Americans became wealthy enough to overeat and too busy earning their wealth to burn off the extra calories. Food (fattening foods especially) became cheaper relative to income and available on instant impulse. The result was physiques that crowd aisles, alleys and airplanes. Vanity used to keep us thin; now it makes us fat... Read the article.  Back to top Forward to a Friend: Do you have a friend that would like to receive ExecWatchsm? Perhaps you know a peer within your organization, or associate at a partner company that would benefit from applying to receive this publication. Inviting a friend to experience the benefits of joining the BusinessWatch Network is easy! Just FW: this newsletter to the person you know who may have an interest and ask them to click here http://www.businesswatchnetwork.com Your friend will be glad you did! 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