Jossey-Bass on Leadership

CEO Pride by Patrick Lencioni

Pat Lencioni writes on CEOs and pride in his latest Pat’s POV:
 
For some reason, I haven’t directly addressed this topic in any of my writings over the years. It’s not because I’m afraid to or that I find it uninteresting. I think it has more to do with having such mixed feelings.

On the one hand, I think the amount of money paid to so many high profile chief executives is bizarrely and tragically excessive. But my take on that excess is different than most. See, I honestly believe that the ridiculous salaries and compensation some CEOs receive is a function of pride more than greed.

I may be naïve, but I just cannot fathom how someone who already has five homes and enough money socked away to put seventy five kids through college can really want more. What is it that they need the money for? Anyone with that much of it must have already come to the realization that it can’t make them happy. That’s why I honestly believe that the pursuit of higher salaries, bigger bonuses, more lucrative stock options and fluffier golden parachutes is more about keeping up with the Jones’ than it is about money. CEOs know what their peers earn, and they want to compare favorably for the sake of their egos more than their bank accounts.

Regardless of the reason, the excessive payouts to executives—especially to the ones who fail—is just plain wrong.

On the other hand, I’m not in favor of addressing the problem through regulation and government involvement. Most fiscal matters the government involves itself in get worse, not better, and letting bureaucrats and politicians tamper with a free-market economy feels like a very bad idea to me.

And for those executives who lead their organizations to financial success, a healthy reward for their work can be justified. Running a company is a demanding and lonely job, and success should be rewarded. However, failure should not be, and far too much of the compensation awarded to chief executives is guaranteed and not tied to performance.

So what is our recourse?

Because of my belief that pride is at the heart of this problem, I think the solution must focus on reintroducing a healthy sense of shame—that’s right—shame, to the marketplace. CEOs should be made publically accountable for the amount of money they make, and the men and women who serve on the boards that approve their compensation packages should share in that accountability. What would that look like?

First, the CEOs of publically traded companies should have their compensation packages made public. Yes, I realize that those packages are already available to anyone who takes a few minutes on the internet to look for it. But I’m thinking of something easier and more naked.

Perhaps, CEOs should have to explain their pay to their employees twice a year, justifying the money they make in light of their contribution to company success. And I’m not thinking of a formal board meeting where an employee would have to risk his or her hide to make a statement, but rather an on-line town hall with video coverage in which employees can anonymously and respectfully demand an explanation.

And maybe those same CEOs should be pressured to include their salary and compensation package at the bottom of their e-mail messages. For instance:

Fred Johnson
CEO, XYZ Corporation
Phone: 212-555-1212 e-mail: fred@xyz.com
Compensation: $2.5 million salary, 12 million stock options, $1 million guaranteed bonus

And wouldn’t it be interesting if whenever a CEO receives a ridiculous bonus after a dismal year, or a golden parachute as a reward for running a company into the ground, he or she should be forced to sit in the lobby of the company’s building for two weeks and endure the reaction of employees?

Finally, more industry analysts and television commentators should ask CEOs questions about their compensation. Because just knowing that they might have to publicly explain why they make so much money would give executives a reason to pause and reconsider if they would rather be known among their peers as getting the most lucrative deal or held in high esteem by employees, customers and shareholders for being responsible and humble.

But whatever we do—and I mean this—let’s do it with love and charity. If we simply demonize CEOs and create an ‘Us vs. Them’ atmosphere, we only contribute to the animosity and division that probably enabled this situation to come about in the first place. Even when we correct and hold people accountable for changing their ways, we must do it out of love.

And that’s a pretty good note on which to wish all of our readers and friends and family a Merry and Blessed Christmas and Holiday Season. 

 
Read Pat’s latest book on applying business skills to family leadership – for a calm Christmas and a less frantic New Year!”

Are layoffs necessary??

Chip Conley, CEO of Joie de Vivre and author of Peak, asks "are layoffs necessary" on his Huffington Post blog. He examines the lasting impact of fear on productivity and company culture, and offers solutions to cut costs without cutting head count at the expense of our most vulnerable:

"So, what's an executive to do? Well, seven years ago due to a combination of the dot-com bust, 9/11, and a souring economy, my company was facing the biggest percentage revenue drop in the U.S. hotel industry since World War II. We stood by the motto "Layoffs Last" in that we told all of our employees that layoffs were the last thing we would do after we'd explored every other option. That meant we did 10% pay cuts for the top execs in the company, we did salary freezes for two and a half years for everyone else in the company, we stopped our 401k match for a period of time, we put a hiring freeze into effect, and we cut certain positions back from five days a week to four. And, as the CEO, I took a salary sabbatical for three and a half years. Just think about the 10% pay cut alone. If your top execs make twenty times the salary of your entry level employees (which is not that far off for most companies), for every 10% pay cut you make for a top exec, you are saving two full-time jobs. And, of course, we all know that the employees who are most vulnerable and, in a service business, sometimes most valuable are those line level hourly workers making $10-20 per hour."

Read the entire article after the jump.

JB in the News: Ron Alsop interviewed by the Huffington Post

Last week, Eric Kuhn of the Huffington Post interviewed former Wall Street Journal editor and author of The Trophy Kids Grow Up to talk about what it means to be a "trophy kid" or part of the "millennial generation" (born between 1980-2001). The interview brings up some important topics, from the current economy and the impact it has on recent college grads to how the millennial generation has played a major role on the success of Barack Obama's presidency.  

Check out the interview after the jump.

JB in the News: Are Brands Becoming an Overheated Property?

The latest issue of Women's Wear Daily features an article on John Gerzema's book, The Brand Bubble.

"At What Price Creativity?

As John Gerzema, chief insights officer at Young & Rubicam, sees it, the rise of the information-based economy has put a premium on the value of ideas. In the case of brands, the value of their entities has rocketed. According to Gerzema's calculations. they've advanced 80 percent in the last 30 years and now account for one-third of the average company's capitalization, or $4 trillion of the $12 trillion in value in the S&P 500, in the first quarter of 2008."

To read more, download the article here.

Advice for Obama: How Obama can rock the White House

                            

By Jeff Carlisi, Dan Lipson and Jay Busbee, authors of Jam! How to Run Your Business Like a Rockstar

 

 

We’d like to take this opportunity to welcome President-elect Obama to the main stage. As he begins building his team of advisors and Cabinet members, we’d like to offer some team-building advice that we’ve observed in the creation of many successful – and many more forgotten – rock bands.

Never forget who’s Boss. While the presidency thrives on consensus and team-building, at the end of the day it’s one man in charge. Like Bruce Springsteen & the E Street Band, one of the President-elect’s favorites, there’s no music without the whole band pulling together – but there’s only one man whose name is on the bill. Everyone in the band needs to keep that in mind.

You need a lead singer. Every great band has a frontman or frontwoman who’s the visible face of the band, and in the President’s case, this role is often handled by the press secretary. For a band, the “public face” is almost always the lead singer, since he or she is the “voice” of the band. Since President-elect Obama presumably won’t be speaking for himself on every single occasion, he’ll need someone who’s dynamic, charismatic, flexible, and able to “sing” to the people in the back of the room as well as the front row.

JB in the News: Patrick Lencioni on KGO ABC 7 News

During these struggling economic times, more and more families are faced with the pressure of trying to make ends meet.  This stress can negatively impact family life, but it doesn’t have to be that way. Bestselling author Patrick Lencioni  invites ABC 7  News to his home and shows them how he has applied his business leadership model to help resolve family issues as well as reestablish strong family values and connection. To check out the full story click here. 

 

Patrick Lencioni is a New York Times best-selling business author of seven books including The Five Dysfunctions of a Team, The Three Signs of a Miserable Job, and his most recent book, Three Big Questions of a Frantic Family. He is also a husband and the father of four boys. As president and founder of The Table Group, Pat has consulted to CEOs and leadership teams in organizations ranging from Fortune 500 companies and start-ups to churches and non-profits. In addition to his books, Pat has written or been featured in publications like Harvard Business Review, The Wall Street Journal, Leader to Leader, and USA Today.

Advice for Obama from Nick Morgan

In our latest installment of “Advice for Obama,” Nick Morgan, author of the upcoming book, Trust Me: Four Steps to Authenticity and Charisma, offers the President-elect some advice on public speaking.

 

Read what he has to say:

 The generally accepted wisdom on President-elect Obama is that he is a peerless public speaker.  Indeed, his message of hope and change ignited huge crowds and propelled him to the Presidency.  But something strange happens when Obama gets in front of a smaller crowd -- say, a press conference, or a roomful of supporters, or a group of 25 skeptical voters.  The essentially closed and private side of the man comes through. 

This is a speaker who can easily ignite a stadium of 70,000 supporters, but has a much more difficult time showing emotion in front of a handful of people.  In small groups, he looks and sounds like what he is:  a smart lawyer, cautious, and discreet. 

Advice for Obama

 This is the first of series of entries we will post from our Jossey-Bass authors offering advice from business leadership to President Elect Barack Obama as we approach inauguration day. The first is from Chip Conley, author of Peak: How Great Companies Get Their Mojo from Maslow, on transformational vs. transactional leaders.

Dear Barack,

It isn't easy being a transformational leader. Congratulations. Let's look at the last two years of your run for this office and see what lessons we have learned about transformational leadership.

1. First, we need to give some credit to James MacGregor Burns who long ago wrote the book Leadership and described two kinds of leaders: "transactional" and  "transforming." He wrote, "the relations of most leaders and followers are transactional--leaders approach followers with an eye to exchanging one thing for another...Transforming leadership, while more complex, is more potent. The transforming leader recognizes an existing need or demand of a potential follower. But beyond that, the transforming leader looks for potential motives in followers, seeks to satisfy higher need, and engages the full person of the follower. The result of transforming leadership is a relationship of mutual stimulation and elevation that converts followers into leaders and may convert leaders into moral agents." It's almost like a transactional leader is leading from the bottom of the pyramid while the transformational leader is leading from the top.

Read more after the jump.

JB in the News: Patrick Lencioni

The second of Pat Lencioni’s columns has appeared in Management Section of the Wall Street Journal’s online business section.  As previously noted Pat has been invited to be a regular contributor to the section.  We don’t know how often they’ll run, but at this rate it could be every few weeks!

You can read the latest here.

What Leaders Learn from Barack Obama

On his True North Leaders blog, Bill George, author of the best-selling titles True North and Authentic Leadership, examines Obama’s campaign strategies, what they say about his leadership strategies and what they mean for today’s business leaders:

The leadership style of President-elect Barack Obama promises to usher in the “we” generation.  The best evidence is not in his campaign promises, but in the remarkable way he ran his campaign.

In sharp contrast to the “Washington-centric, tops down” organizations of Senators McCain and Clinton, Obama’s organization was derived from his formative experiences as a community organizer. Lessons learned in Chicago’s streets translated into history’s most successful campaign organization.  

Read entire article after the jump.