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| Volume 8, Issue 4 |
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In This Issue:
 Your boss is a monkey
 The most valuable [private] companies in America
 Eliot Spitzer's seven deadly sins
Interactive case study: A CEO's call on customer service
 Presenting smart: What's the worst presentation advice?
What employees want
 Down $900 million or more, the chairman of Bear sells
The face of a prophet
 Four companies that conquered America
HBS cases: JetBlue's Valentine’s Day crisis
 Regulate all that leverage
Back pain: What works
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Your boss is a monkey
"Managing up" using the tricks of exotic-animal training.
Exotic-animal trainers need a great poker face. Let's say you're a trainer, and one day, a beluga whale spits a mouthful of cold water at you. Your first instinct will be to shriek or jump or curse, but any reaction will probably reinforce the
spitting. If you react, that whale will own you, and you'll be a Spit Bull's-eye for the rest of your life. Instead, you must ignore it and appear unfazed, expressionless -- a training technique called "least-reinforcing scenario," or LRS. The writer Amy
Sutherland studied animal trainers who could teach whales not to spit, dolphins to jump through hoops, and monkeys to ride skateboards. One day, it hit her: What if she used those techniques on her husband? This epiphany led her to write her witty and
engaging new book, What Shamu Taught Me About Life, Love, and Marriage. Shamu proves that behavioral training works on whales and husbands. But let's apply Sutherland's
approach to another irritable mammal: your boss. Maybe you should start treating him or her like an exotic animal. Say your boss is a yeller...
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The most valuable companies in America
A lot of the economic news these days seems depressing, but there is at least one reason to remain optimistic:
It's still a great time to sell your business. To get a sense of where the market is headed these days, Inc. has partnered, for the fifth straight year, with Portland, Oregon -- based Business Valuation Resources, a leading provider of data about private
company transactions. The information here is based on 3,838 transactions completed from January 1, 2004, to December 31, 2007, in 141 industries. So where are the real opportunities?...
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Eliot Spitzer's seven deadly sins
Lust is the least of it. Here's a look at the mistakes New York's sex-scandal-scarred governor made, and the lessons for any leader—in politics or business.
Stunning, shocking, schadenfreude-inducing. All those adjectives have been used to describe the fall of Eliot Spitzer, "The Sheriff of Wall Street" and the man Time Magazine named "The Crusader." On the surface it seems his involvement with a prostitution ring and other
possible illegal behavior are what doomed him as governor. But really they're only the tip of the iceberg. As a leader and manager, Spitzer made plenty of other mistakes that made it untenable for him to stay in office. Here are Eliot Spitzer's seven deadly sins (with
apologies to St. John Cassian, Pope St. Gregory the Great, and Dante), and the lessons they contain for any leader or manager...
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Interactive case study: A CEO's call on customer service
James Parker, Southwest's former CEO, fought to save call-center jobs despite pressure from the finance team and tough times in the airline industry.
James Parker couldn't have picked a worse time to become chief executive officer of a major airline. In June, 2001, the former Southwest Airlines (LUV) general counsel was named to the top spot—just three months before the airline industry went into a tailspin following the terrorist attacks of September 11.
While airlines all around him were cutting back on staff and salaries, Parker managed to protect Southwest employees' jobs. Two years later, the Southwest veteran wasn't so lucky...
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Presenting smart: What's the worst presentation advice?
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John Windsor, an online columnist for Sales & Marketing Management, and president of Creating Thunder, a Boulder, Colo.-based communications training and consulting company. As author of the popular YouBlog, John offers a unique mix of innovation,
communications, sales and marketing ideas. An award-winning marketer, John has held vice president positions in marketing, sales, and business development and has worked with companies like American Express, Reuters, Staples, and Knight-Ridder.
Countless books, seminars and gurus preach how to give an effective presentation. Some of the advice is outstanding, but some of it is less so. But what is really shocking is that the most common piece of advice is perhaps the worst piece of advice:
- Tell them what you're going to tell them
- Tell them
- Tell them what you just told them
Now, this approach is not without value. It helps presenters be clear about their message so the audience won't leave thinking, "What was that about?" And repetition and reinforcement can aid retention, provided the repetition is not simplistic. But the
potential for mediocre-to-poor results from following this formula is HUGE. It's much more a recipe for disaster than a clear path to success. Why is it so bad?
What Do We Do Instead?...
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What employees want
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Brady Wilson is a co-founder of Juice Inc., a Guelph, Canada-based solution provider for leaders who want to boost their organizational energy level and employee engagement.
It's not money or flex hours. Rather, employees want to feel they are a good fit in the organization, are clear about their job, are supported in their role, are valued, and are inspired.
Getting the very best from employees has become the holy grail of the training and human resources industries. Millions of training dollars are spent to determine how to achieve a state of "flow" where workers are functioning at a high level of productivity,
efficiency, and engagement. But can this be sustained for more than a few days? And is it even possible? The answers to both questions are a resounding "Yes." And the benefits lead to bottom-line results. We've seen organizations boost their employee engagement
and report a year-over-year doubling of their sales growth; reduce their returns and credits by 50 percent; set new safety, productivity, and customer service records; and save millions on their bottom line through increased efficiencies. In fact, when
employee research and consulting firm Towers Perrin-ISR conducted a 2006 study of 664,000 employees worldwide, it found a 52 percent gap in the one-year performance improvement in operating income between companies with highly engaged employees versus
those with low engagement. However, the path to getting there is not the one most of us would think of taking because it's right in front of our eyes.
Stairway to Engaggement. The first step is to know...
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Down $900 million or more, the chairman of Bear sells
Oscar Hidalgo/The New York Times
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James E. Cayne, the Bear Stearns chairman, sold his shares on Tuesday.
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Only a year ago James E. Cayne’s stake in Bear Stearns was worth more than $1 billion. But on Thursday, Mr. Cayne, the chairman of Bear, disclosed that he had sold all of his shares in the troubled investment bank this week for just $61 million.
While the sale leaves Mr. Cayne a wealthy man, it nonetheless underscores the deep losses suffered by Bear’s shareholders after the company’s forced sale to JPMorgan Chase two weeks ago. And for Mr. Cayne, the liquidation evokes a deep sense of loss. It
represents a humiliating capitulation for a brash executive who, with his ever-present cigar, suspender-snapping ways and Friday golf outings in the summer, epitomized the
classic, if outdated, picture of the Wall Street chieftain. To the end, Mr. Cayne heeded the advice he often gave his colleagues at Bear:...
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The face of a prophet
Joel Saget/Agence France-Presse — Getty Images
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George Soros wants to make a lasting contribution to economic understanding.
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At the age of 77, Mr. Soros, one the world’s most successful investors and richest men, leapt out of retirement last summer to safeguard his fortune and legacy.
Alarmed by the unfolding crisis in the financial markets, he once again began trading for his giant hedge fund — and won big while so many others lost. Mr. Soros has always been a controversial figure. But he is becoming more so with a new, dire forecast for
the world economy. Last week he rushed out a book, his 10th, warning that the financial pain has only just begun. “I consider this the biggest financial crisis of my lifetime,” Mr. Soros said during an interview Monday in his office overlooking Central Park. A
“superbubble” that has been swelling for a quarter of a century is finally bursting, he said...
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Four companies that conquered America
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No CEO can lead a global company if that company does not have a strong presence in the USA.
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Accounting for almost 30 percent of world GDP, the United States is the
world's largest and most demanding market for almost everything from oil to microprocessors to premium coffee.
Companies around the world aspire to do business in the U.S., or at least with U.S. companies in their home markets. By doing so, they learn much about the latest management practices, they can be closer to the cutting edge of innovation, and they can
boost their reputations by supplying well-known U.S. firms. The market size of the U.S makes it an important target but, in addition, foreign companies often feel they have to crack the U.S. market in order to gain respect. No CEO can lead a global company if that
company does not have a strong presence in the USA. So how do you penetrate the U.S. market? The annals of business are littered with foreign companies that have never quite
succeeded in the USA. But here are four companies that have. Each carries a special lesson...
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HBS cases: JetBlue's Valentine’s Day crisis
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JetBlue is ultimately better for having gone through this.
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It was the Valentine's Day from hell for JetBlue employees and more than 130,000 customers. Under bad weather, JetBlue fliers were trapped on the runway at JFK for hours, many ultimately
delayed by days. How did the airline make it right with customers and learn from its mistakes? A discussion with Harvard Business School professor Robert S. Huckman. Key concepts include...
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You don't need to be a frequent flier to know that the friendly skies aren't so friendly anymore. Cramped,
overloaded planes, flight delays, and bare-bones amenities are the norm on most of the legacy carriers.
But low-cost airlines like Southwest and JetBlue have found opportunity in the misery, and captured more of the market, with competitive fares, friendly service, and in the case of JetBlue, leather seats with television. Founded in 1999, JetBlue has seen rapid
growth and frequently tops annual customer surveys of their favorite airlines. But on a Valentine's Day to remember (or forget) all that changed. HBS associate professor Robert Huckman, professor Gary Pisano, and research associate Virginia Fuller tell that story
in "JetBlue Airways: Valentine's Day 2007," a case taught in the MBA course Operations Strategy that examines the confluence of issues leading to what JetBlue founder,
chairman, and then-CEO David Neeleman would later call "the worst operational week in JetBlue's seven-year history."...
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Regulate all that leverage
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According to the eminent, tough-minded former chairman of the Federal Reserve Paul Volcker, Wall Street investment banks "need regulation of the leverage in their operations and on their balance sheets." |
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The question, says Volcker, is: "How do you do it so that investment banks end up with a leverage limitation?" Such a move could change the wide-open entrepreneurial model of investment banking, reducing its extraordinary prospects for profits, and perhaps
dissuade so many bright young people from a career choice that involves making as much money as possible as quickly as possible. Even in the wake of the crisis atmosphere post-absorption of Bear Stearns by JPMorgan Chase, most major investment banking
companies still are leveraged 30 to 1, meaning that they have $30 of obligations and liabilities for every $1 of equity capital. In good times when markets are rising, this extreme leverage magnifies the profits and the stock values of the likes of Goldman
Sachs, Lehman Brothers, Credit Suisse Group, Morgan Stanley and a host of others. But in rocky times, this kind of leverage can sink the ship in no time at all, as was the case of Bear Stearns and innumerable hedge funds that have closed shop and are being
liquidated. Following Volcker with a brilliant and troubling discourse on the crucial economic problems facing the U.S. was former Treasury Secretary Lawrence Summers. In a forum sponsored by the Kennedy School at the Harvard Club of New York, Summers, now a
professor of economics at Harvard, suggested that he personally believes the amount of leverage in the financial system to be...
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Back pain: What works
Simple treatments may help as much as high-tech gadgets or surgery.
James Weinstein, an expert in back pain at Dartmouth-Hitchcock Medical Center, was bending down two years ago when his back went out. The pain was so bad he could hardly breathe. For ten minutes "my hands were on my knees and I couldn't stand," the renowned
orthopedic surgeon says. He hoped none of his patients would happen by and see him. It took him ten minutes to struggle out to his car. As he lay on his back at home, his wife politely reminded him of the advice he gives his patients: Take some aspirin, get out of
bed and get back to a normal routine as soon as it's tolerable. The next day he forced himself to take a jog. The first steps were excruciating, but by the end he felt a little better. He recovered a week later. Back pain hits tens of millions of Americans
every year. The cost of treating it was $86 billion in 2005, up 65% (in real terms) from 1997, a recent University of Washington study estimated. Where did the money go? Brand-name narcotics and all sorts of new gadgets. But the same study found that
patients aren't feeling any better than they did a decade ago. "A lot of the things we are doing aren't offering much benefit," says Richard Deyo, of Oregon Health & Science
University, one of the study's coauthors. The good news is that according to recent studies, several low-tech approaches do appear to help. Here are some pointers...
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