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If you are having difficulty seeing this mail or images in it, you can view it in your Web browser. Volume 7, Issue 6      In This Issue:   CEOs & CFOs   The truth about CFO Turnovers   Customer relationship marketing   Hackers targeting executive emails   How to get on a Board   Venture capital's hidden calamity   Big traders dive into dark pools   How to hire an ad agency   Is your town toxic?   7 Lessons from a bad manager   Ending the bitter feud between sales and marketing   The seven fundamental management skills for leaders at all levels   Seven deadly sins of branding   Not so fast: The tao of Steve [Jobs]   The way I work: Kim Kleeman   My bad   Encouraging dissent in decision-making   Negotiating in three dimensions   Secrets of the self-made 2007   How to be a workaholic... without killing yourself   My door's always open   Directors have their say on pay   Best fitness benchmarks CEOs & CFOs The CEO-CFO Why do some CEO-CFO pairings soar—while others crash and burn? TODAY, MORE THAN EVER BEFORE, A CEO and CFO must function as a team. Financial expertise has always been critical to managerial strategy, but rampant mergers and acquisitions, shareholder activism and ever more complex regulatory requirements are recasting the CFO role—and, in turn, the relationship between finance chiefs and their CEOs. The change isn’t always positive. While many CFOs report having more involvement in strategy, others say that intense scrutiny from regulators and wall street, coupled with onerous compliance requirements, have turned the job into one of endless drudgery. This Chief executive special report examines why some CEO-CFO partnerships work—and why some implode. Jennifer Pellet “I used to joke ‘they are the kite, and I am the string,’” says Andrew Greenebaum, referring to his CFO tenures at three different firms. “CEOs are dreamers and thinkers, and CFOs are the watchers of the purse strings.” That point of view jibes with results of a recent survey in which... Read the article.  Back to top The truth about CFO turnover Why nearly one in seven Fortune 500 companies lost a CFO last year—and how to stop the exodus. Alvaro de Molina may not have been the first CFO to leave his position in search of something better, but he was probably the most candid about why he was leaving. Calling his job “suffocating,” de Molina exited Bank of America last December after only 18 months as finance chief. “The roles of the CFO and the CEO are not as fun as they used to be from a regulatory standpoint, but the CEO gets to run the show,” de Molina told the press at the time. “The CFO of a well-run company gets all of the guts but none of the glory.” That sentiment may well sum up why turnover among CFOs at public companies has soared over the past three years. In 2006, 12 Fortune 50 CFOs bailed on their jobs, while the year before, companies with $1 billion-plus market caps changed CFOs three times more often than they did in 2002. Though a recent study by global executive search firm Russell Reynolds Associates found that CFO turnover as a whole slowed a bit in 2006, CFO departures due to resignations actually increased by 41 percent over 2005. Why Do They Go? Aside from firings over poor performance and backdating scandals, many, like de Molina, are simply fed up. Having achieved... Read the article.  Back to top Customer relationship marketing How to grow the value of a customer. A lot of CEO’s that I have met and helped over the years thought that they were in the product business. Selling products to customers. What I got them to understand that helped them refocus was that you are in the customer business. Your business is about finding, satisfying, delighting and growing the value of a customer. I’d like to share a personal story with you and then move on to some other examples on a larger scale. For many years I struggled with... Read the article.  Back to top Hackers targeting executive emails Hackers Targeting Executive Emails. Not focusing on Internet security is like opening the cash register to hackers and thieves; these modern-day threats require CEOs to constantly reassess the emerging dangers of the Internet, warned Champ Mitchell, CEO Networking Solutions in his article with Chief Executive {Read: Taking Internet Security off the backburner}. It’s been two years since the article was published and now there are news reports of email hackers targeting c-level executives with precision malware looking to harvest intellectual information from them. Last month, Internet security firm, MessageLabs intercepted as many as 500 emails laced with malware targeted against individuals in senior managerial positions. The precision attacks in the form of emails - often mentioned the name of the executive, his designation and other such personal information - are intended to lure the executives to open malicious attachments, says experts. According to an analysis by MessageLabs, 30 per cent of the attacks were aimed at Chief investment officers (CIO), 11 per cent were directed against Chief Executive Officers (CEOs); other job titles among the top ten targets included Chief Information Officers (CIOs), Chief Financial Officers (CFOs), directors of research, directors of developments and company presidents. MessageLabs, suspects that these attacks are a handiwork of... Read the article.  Back to top How to get on a Board It's neither as simple nor as difficult as people may think. Following this practical advice can increase your chances of being able to serve on a board. There are three popular myths about getting on a board: Myth No. 1: Because of the shortage of directors willing to serve, it's easy to get on a board today. Reality: Most active chief executive officers now limit their outside board seats to one, and even retired executives seldom serve on more than three or four. Directors are being more selective about the board invitations they accept, and some highly qualified execs refuse to consider serving at all. Board invitations are, indeed, rolling in for experienced directors. But landing your first board seat is... Read the article.  Back to top Venture capital's hidden calamity Let's Make a Deal Increasingly, private equity firms are discovering small business A closer look at otherwise strong investment growth shows many firms are getting all the drawbacks of a hot market, with few of the benefits. This is a bad time to be a venture capitalist. Anyone who says different is raising a new fund—or works at one of the few firms having a good year. Sure, the numbers look great on the surface. The value of deals rose a solid, yet not bubbly, 8% in the second quarter, with investors pumping $7.4 billion into emerging companies, according to Dow Jones VentureOne. And the money is funding some legitimately exciting frontiers, including Web 2.0, which attracted $500 million in the first half. Companies specializing in clean tech got $1.1 billion in the same period. Initial public offerings are up for the year, too. In the second quarter, venture-backed companies tapped the public markets for $2.73 billion, the most raised in a three-month period since the go-go days of 2000. And researchers expect the current period to be another banner quarter, with a whopping 46 companies looking to file. IPOs and Acquisitions Tell a Different Story But a closer look at the numbers reveals some disturbing trends. Consider IPOs. Most of the initial share sales getting done are mainly one-off companies that were founded years ago and have slogged away at building solid businesses for a half-decade or more. This year's biggest hits were MetroPCS (PCS) of Dallas and EMC's (EMC) spin-out of VMware (VMW)—hardly your classic Silicon Valley startups. There's simply no big overall tech movement getting Wall Street revved up, and among entrepreneurs, the feeling is mutual. Sarbanes Oxley and other regulations have made the prospect of going public far less appealing. The picture looks worse among acquisitions... Read the article.  Back to top Big traders dive into dark pools The alternative trading systems are luring big institutional customers by offering greater privacy and lower costs. Their growth could affect big exchanges. It's not easy being a big player in the stock market. Trading huge quantities of stock on traditional exchanges has become ever more challenging, costly, and potentially disruptive. And if other players see your moves, they can disrupt your trades. That's led to the emergence in recent years of alternative trading systems known as dark pools. And their growth could have significant implications for big stock exchanges—and individual investors. Dark pools sound like something from Greek mythology or a sci-fi epic, but in stock-market speak they are... Read the article.  Back to top How to hire an ad agency Our columnist offers 10 guiding principles to consider the next time you're looking for an advertising agency. Here's a staggering statistic: In the month of June alone, accounts worth over $1.7 billion changed advertising agencies. And that's only among the six largest advertising agency holding companies. It doesn't include any of the brands that shifted their accounts to thousands of independent agencies across America. Why so much turnover? One reason is the diminishing tenure of the chief marketing officers who hire agencies—an average of less than two years, according to one recent study. But even in companies where the marketing staff is stable, the temptation to shop for a new agency can be strong. Advertising is an exciting, visible business, and when another brand's agency is making news, it can make their grass appear greener. Plus, it's a business based on experience, confidence and trust. When trust breaks down, relationships end. Whatever the reason for an agency switch, too many companies make their selection based on the wrong criteria. That causes heartache, inefficiency, and a significant amount of lost productivity. I'd like to offer 10 guiding principles to follow the next time you're looking for an advertising agency. Let's start with the five things you shouldn't do:... Read the article.  Back to top Is your town toxic? Slide Show: America's Most Toxic Cities Environmental hazards can cause health problems and hurt home values. When in doubt, order a neighborhood environmental report before you buy. Falling home prices may not be the only thing poisoning your neighborhood. Landfills, abandoned manufacturing plants, and leaking underground petroleum tanks sometimes lurk in the backyards of unsuspecting homeowners and home buyers, leading to serious health issues and spoiled real estate markets. Which areas of the U.S. have the highest concentration of contaminated sites? The list might surprise you. Baltimore, Milwaukee, and Portland, Ore., are three of the biggest offenders when it comes to number of contaminated sites per capita, according to Environmental Data Resources (EDR), a provider of environmental risk information services based in Milford, Conn. But EDR is quick to note that this doesn't automatically mean the cities aren't safe... Read the article.  Back to top 7 Lessons from a bad manager Many people work for bosses who are horrible at what they do. It is an enviable situation that is fairly common. When circumstances such as these arise, most dwell negatively on the situation while complaining about how terrible their plight is. Naturally, this does not yield productive results. Nonetheless, the individual seems to take solace in the whining. A much better approach when confronted with this scenario is to attempt to learn all you can from the situation. The changing of jobs is so common in this era that 5 years is considered long term tenure. People facing this dilemma often only need to deal with it for a short period of time. Typically, either the manager or the employee move on within a reasonable time frame. If an individual tries to gain all the knowledge possible from that person, he/she skills will grow. I encountered a working relationship similar to what others experience. My experience within the particular field was 9 years when a new manager was brought in. He was new to the industry. Knowing this, all the employees were willing to give him reasonable time to learn the trade. Unfortunately for this individual and the company, his duration with the firm was short-lived. Working under him offered me an invaluable opportunity to witness a failed approach to management... Read the article.  Back to top Ending the bitter feud between sales and marketing selling efficiency improved markedly as salespeople began to spend more time with customers on the right topics and less time on non-relevant currencies." Appalachia had the Hatfields and McCoys. Texas had the Regulators and the Moderators. Tennis had Connors and McEnroe. And business, too, has its own infamous bitter battle. "In too many companies, Sales and Marketing feud like Capulets and Monatgues," so begins a recent Harvard Business Review article by Phil Kotler, Neil Rackham, and Suj Krishnaswamy. The impact of the raging conflict between sales and marketing on business performance is well-documented. Harvard Business School's Professor Benson Shapiro, a leading authority on sales management, contends the biggest problem in business today is that, "sales and marketing are in separate fiefdoms. They don't even talk to one another." A recent CSOInsights study compared two groups of firms, those who excelled at lead generation optimization (LGO) and those who were average or poor. The study found that LGO leaders—companies characterized by the close integration of sales and marketing teams—had higher win rates, a higher percentage of the sales force hitting quotas, and quicker learning cycles for new members of the sales team. Unfortunately, only about 9 percent of firms fall into this LGO group. Kotler, Rackham, and Krishnaswamy list higher market entry costs, longer sales cycles, and higher cost of sales as consequences of the strained relationship. We've found the friction between the two departments harms... Read the article.  Back to top The seven fundamental management skills for leaders at all levels At the heart of creating value and long-term success for most organizations is the ability to design and develop a product or service to serve a targeted group of end users. For purposes of this discussion, we will call those end users "consumers." In most cases, consumers are people like you and me who buy items for our personal use. An end user also might be another company that buys your product or service for its own final use or to use in producing some other product to be on-sold. A "brand" represents a promise to consumers of what to expect from a product or service. Brand positioning is the process of establishing that promise in the minds of consumers. Through effective brand positioning and related marketing actions, your product or service can become a recognized and valuable brand, known for delivering real benefits to consumers that are distinct and different from your competition. When brands deliver on their promise... Read the article.  Back to top Seven deadly sins of branding In the $36 billion dollar beer market, the brand strength of an American beer is sometimes its most powerful "reason-to-buy." The Wall Street Journal recently had this to say about the Stroh Brewery, the nation's fourth largest brewer, now being sold off: "The sale of Stroh, a 149-year-old Detroit brewer that was once a strong contender in the beer market, is the result of poor brand management in a flat market, distributors said…If [Stroh] didn't take advantage of its strong regional brands…" The above story doesn't just happen overnight. For every "right" a brand can do, it can also make multiple "wrongs"—actions that simply don't contribute anything worthwhile to a brand's presence, personality, strength and, ultimately, its sales. So how do you know when you've made a wrong before its too late? To better manage the fate of your brand, here's a compiled things-not-to-do checklist that... Read the article.  Back to top Not so fast: The tao of Steve [Jobs] The real reason we keep buying Apple products. The column you're reading right now was typed on an Apple PowerBook G4 whose fan is only slightly quieter than a Formula One racing car and which crashes in an equally spectacular yet horrifying manner. My previous Apple (NASDAQ:AAPL) laptop began falling apart week one, when a flimsy plastic key on the flimsy plastic keyboard abandoned its tenuous hold and took a suicidal leap onto the nether regions of its owner's desk. Other keys, perhaps despairing of their own mediocrity, eventually followed suit. That keyless laptop sits next to a drawer I informally refer to as the iPod graveyard. Some of them were shipped back to their creator, where they were rescued from near death only to meet their demise weeks later, victims of what I presume to be the digital equivalent of internal bleeding. And yet I keep buying Apple products... Read the article.  Back to top The way I work: Kim Kleeman Her business wants more (and more) of her time. Is the CEO of ShakespeareSquared going to give in? Let's just say that her BlackBerry sleeps in the car. Kim Kleeman is founder and president of ShakespeareSquared, a Glenview, Illinois, company that creates educational materials--lesson plans, teacher guides, activity workbooks, discussion guides--for large publishers. The company did $2.3 million in business last year, capping a three-year growth spurt of 815 percent. Here Kleeman describes the challenge of running an (almost) all-women company and her carefully tended system for sustaining work and family life. Up until six years ago the last thing I wanted was to be an entrepreneur. I like sane hours. I like routine. I like knowing where my next paycheck is coming from. My father's been an entrepreneur for 40 years: He's owned delis, restaurants, and retail businesses. My mother always helped him. It was a hard life, hard on us kids, and not what I wanted for me and my family. So I married my college sweetheart and we both became teachers. It was wonderful. But when my eldest daughter, Casey, was just a few years old she was diagnosed with juvenile rheumatoid arthritis. When it flares up she has trouble walking, and it makes her vulnerable to other diseases. Casey's not a "sick" child; she gets straight A's and she's super-friendly. But she has chronic pain, and I have to help her live with it. She has five or six different doctors that she sees regularly, and every three months she goes for blood tests. When this started I thought: How am I going to take time off for all those appointments? Plus, our health insurance sucked. As teachers, my husband, Jay, and I were in an HMO and just managing the referrals was a full-time job. I decided to start the business so I could make my own hours and create a benefits package that was good for me and working mothers like me... Read the article.  Back to top My bad Sometimes, even CEOs have to say they're sorry. To err is human--but for leaders, mistakes can be excruciating. CEOs have big footprints, so their missteps often hurt many beside themselves: employees, stockholders, society at large. And leaders sometimes buy into the widespread assumption that people in authority have better instincts and make smarter decisions than everybody else. Confessing mistakes, consequently, can be an emperor-disrobing experience for a CEO. "Leaders are supposed to be decisive, correct, and confident," says Rod Kramer, professor of organizational behavior at Stanford University's Graduate School of Business. Handled skillfully, however, admitting a mistake can bolster a leader's stature. Maureen Borzacchiello, CEO of Creative Display Solutions, kept it simple and sincere in June 2006 when she informed employees that... Read the article.  Back to top Encouraging dissent in decision-making Our natural tendency to maintain silence and not rock the boat, a flaw at once personal and organizational, results in bad—sometimes deadly—decisions. Think New Coke, The Bay of Pigs, and the Columbia space shuttle disaster, for starters. Here's how leaders can encourage all points of view. What lessons could the humid shores of the Caribbean, the freezing heights of the Himalayas, or the farthest reaches of Earth's atmosphere hold for your company or organization? Although those places couldn't be more different, all were the scenes of disastrous outcomes brought on by a weakness to which all organized human groups are susceptible—the suppression, especially during planning and decision-making, of views that might be perceived as contentious or disruptive to an organization's foundational beliefs. Consider the costs to organizations, large and small, when dissent does not or cannot surface: Abjuring rigorous debate about its merits, a youthful president John F. Kennedy essentially rubber-stamped a 1961 plan to invade Cuba at the Bay of Pigs, resulting in one of the biggest U.S. foreign policy fiascoes in decades. During a 1996 commercial expedition to the summit of Mt. Everest, several climbers, including two of the world's most experienced professionals, died in part because junior team members didn't speak up when their expert leaders ignored their own core operating principles surrounding safety. In 2003, NASA engineers were reluctant to challenge long-held beliefs that foam strikes incurred during the launch of the space shuttle Columbia posed no risk to its fuselage. This propensity to maintain silence, a flaw at once personal and organizational, is "widespread and problematic" in both in both the public and the private sectors, says HBS professor Amy Edmondson, who chairs the Doctoral Programs and teaches in the Technology and Operations Management unit. [This reluctance to speak up stems variously from fears that superiors will]... Read the article.  Back to top Negotiating in three dimensions Dealing with the 'Irrational' Negotiator Tactics, deal design, and set-up are three crucial components of the most effective negotiations. 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. Martha Lagace: 3-D Negotiation presents a multi-dimensional approach for people who thought negotiation was only about what happens at the bargaining table. What common mistakes do you see and what typical assumptions about negotiation are you challenging? James Sebenius and David Lax: Even experienced negotiators make mistakes in all three dimensions. Let us start with the least familiar kind of mistake. Flaws in our third dimension, the set-up of a negotiation, can take many forms: wrong parties, wrong issues, wrong walkaways, wrong sequence, wrong basic process choices. Here's one common set-up error (among many): It is easy to make one kind of mistake in your choice of negotiating agents. You know the importance of using a skilled and knowledgeable negotiating agent as well as crafting a contract that aligns your agent's incentives with your own. Yet a well-structured contract with your agent may not be enough... Read the article.  Back to top Secrets of the self-made 2007 They're rich-- really rich--and in the mood to share. Their secrets, that is. We played 20 questions with 21 self-made members of the Forbes 400. Result: an exclusive, introspective and often playful peek into their best days, worst qualities, guiltiest pleasures and hardest lessons (among other things)... Read the article.  Back to top How to be a workaholic... without killing yourself So You Married A Workaholic Quiz: Are You Getting Enough Sleep? Everything you need to know to keep your sanity while burning the midnight oil. Robert Berman works 60 to 70 hours a week. When the 59-year-old communications consultant from Toronto is on one of his frequent business trips, he often “fails to acknowledge that it’s Friday” and works through the weekends for weeks at a time. He’s missed birthdays with his kids and anniversaries with his wife of 38 years. He even missed his daughter’s high school graduation. “According to most people I know, I was born a workaholic,” Berman says. “I enjoy doing what I do. I prefer to do business 24 hours a day if I can.” Workaholics are common. These people are often compelled, and even excited, to be at work more than social situations, whether they enjoy what they do or not. United States workers put in an average of 1,804 hours of work in 2006. That's a lot less than some countries--Korea topped the list with 2,305 hours--but it's still almost 300 more hours than the average Frenchman works. Yet, those long hours don’t have to wreak havoc on your life, and there are ways to make your time more enjoyable (and more efficient), both in the office and out... Read the article.  Back to top My door's always open Some CEOs are forsaking their swanky offices for a cubicle on the main floor. They say it's egalitarian--and efficient. Two perks of being the CEO of an organization are particularly beloved: the fat paycheck and the keys to a swanky office. New York City Mayor Michael Bloomberg aside, not many people forsake both. But there are a growing number of CEOs opting to work among the people instead of behind large, intimidating doors. Granted, it's still a relatively small group but they are a passionate bunch. They say it's an effective way to lead because it makes them approachable and increases communication... Read the article.  Back to top Directors have their say on pay Two-thirds of directors say boards are having trouble controlling CEO compensation, a survey finds. Every time another chief gets a rock star salary, another board of directors loses control. That's how the majority of directors in corporate America feel about CEO compensation based on new data compiled by the accounting firm PricewaterhouseCoopers. According to the What Board Directors Think 2007 Annual Board of Directors Survey, 67% of directors believe U.S. company boards are having trouble... Read the article.  Back to top Best fitness benchmarks In Pictures: Best Fitness Benchmarks   If you've ever tried to set a fitness goal, you know it can be tricky business. Set the bar too low and you may find you're lacking motivation. Aim too high--think a four-minute mile--and you're bound for disappointment. So how do you set goals that are right for you? One way to go, fitness experts say, is to assess and record your baseline fitness scores for such yardsticks as your... Read the article.  Back to top Forward to a Friend: Do you have a friend that would like to receive ExecWatchsm? 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