Sunday, June 29, 2008

Deciding Who Leads

With all the kudos that I have seen surrounding my colleague Joe McCool's book Deciding Who Leads, I keep having the feeling that in a few years I'll be one of those guys who walks around at cocktail parties when they are discussing books that made a difference in specific industry segments and telling my friends that "I knew Joe when..."

I was reminded of this feeling just a day or two ago when I saw an email from the managing director of a UK based search firm you simply said:

"This morning I read through some of the key passages in Deciding Who Leads! superb book - should be on every hiring manager's desk and every recruiter's desk and perhaps every MBA course syllabus!"
The Brits, as we all know are not exactly known for going overboard when it comes to suggesting that something has real merit, so even though I had seen other comments on the book, this one made me feel a good deal of pride yet once again.

Way to go Joe!

Monday, June 23, 2008

The Worse Than Enron Sweepstakes

The piece below is something that I stumbled across back in March when the sub-prime mess was really beginning to build up steam. Now, as we sit here some three months later and the layers of the onion have revealed even more greed-filled headlines, what Mr. Donlon had to say seems even more appropriate.

Even on a topic about which I feel as strongly as I do on this one, I wouldn't normally post another source's entire article, but in this case I decided to make an exception because (a) I couldn't figure out what to leave out because it all seemed to fit together so well, and (b) I thought it important to expose readers to Donlon's intellect if he was someone about whom they had not heard. See if you don't agree that he is voice we could use more of.

Déjà Review

By J.P. Donlon

Here we go again. The fallout from the subprime mortgage mess has led to another burst asset bubble. Led by Citigroup and Merrill Lynch we have seen the financing of real estate get ahead of itself to the point where the banking system has come face to face with a heady balance sheet problem. There is $900 billion (out of a total of $9 trillion in mortgage debt) in subprime paper on the balance sheets of the world’s banks, investment houses, hedge funds, and mutual funds. In total there are 2,500 different subprime bond issues. Not all these have gone bad. But we may not know for some time the extent of the mess. The extent of miscalculated risks has already seen almost $100 billion in shareholder assets disappear. The fear is that falling housing prices will only make credit troubles worse as it reduces any incentive to keep paying the mortgage.

All of this will take time to work out. But in the meantime the finger pointing has begun. Why in a post Sarbanes-Oxley world has this been allowed to happen? Writing the City Journal, former financial analyst Nicole Gelinas, and a past contributor to Chief Executive, asks whether additional regulation makes us any safer or perversely lulls investors into a false sense of security about their investments.

“In the end, Sarbanes-Oxley has just made it easier for ambitious government attorneys to criminalize bad business judgment and complex accounting in hindsight,” she writes. “Further, in their focus on strengthening legal enforcement, the feds have passed up opportunities to create commonsense protections for investors. Worse still, the government has instilled investors with false confidence by implying that they can rely on prosecutors, not prudence, to protect their market holdings. Now the housing and mortgage meltdown—which could hurt the economy far worse than Enron did—is reminding investors that no law or regulation can protect them from economic disruption.”

Just as the bond rating agencies awarded Enron high ratings suggesting that investors could safely lend to the doomed company, critics today believe that the same culprits are likely at fault in today’s credit mess. New York Attorney General Andrew Cuomo’s office is looking into how the ratings agencies assigned top triple-A ratings to many bonds backed by risky subprime home loans. He wants to know if the firms asked for and received information that would have warned them about specific risks associated with home mortgages. At this point the AG hasn’t filed any charges against the ratings firms.

But the larger question looming over the subprime mortgage mess is this: Will government throw more regulation at the problem in an effort to be seen as “doing something” when the evidence strongly suggests that this will do little or nothing to stave off the next debacle? Despite decades of bitter experiences - from Mexico in 1982 to Asia in 1997 and Russia in 1998 - financial institutions still bow to fads and fashions. They act herd-like in conformity with "lending trends". They shift assets to garner the highest yields in the shortest possible period of time.

The government treated the implosion of Enron as though it were somehow unique when in fact it was fairly routine. When one strips away the Fastow spin, the company overstated the value of its assets and understated the extent of its liabilities. The only difference is that the investment community was only too eager to go along with the scheme because it was in their interests to do so or at least not to look under too many rocks. But as Gelinas points out investors began deserting Enron before the regulators took notice, proving that the market effectively weeds out bad companies and ultimately bad investments.

This begs another question: What is normal business practice in the midst of a bubble? When a company hits an air pocket does it tell its shareholders about the risk of failure or does one say one is merely going through a bad patch and things will right themselves soon enough? If one is a CEO one should have one’s defense attorney close to one’s elbow. The SEC has several investigations into the lending practices at Countrywide Financial, which has become the poster child for the current mortgage crisis. If any charges are filed one can be certain that prejudices will run higher. An Enron juror was quoted as saying, “pure greed motivates all CEOs. Some get caught; most don’t.” Enron was just a flashy energy company. Multiply by 10 the outrage and sense of “payback” at a mortgage crisis trial

Tuesday, June 17, 2008

Getting From Here to There

ExecuNet is celebrating its 20th anniversary this year, and as a result, that sort of a milestone event has prompted a number of interview requests from various and sundry media wanting to know how this all happened and the details from ’88 to now.

As I have talked over the past several months with many different reporters and writers of many stripes, it has caused me to reflect frequently about the past 20 years and the transformation that I have experienced in my professional work life. It also got me wondering what the stories might be from others both inside and outside our membership.

In talking with our Executive Editor Lauryn Franzoni about this, she suggested it would probably be both fascinating and fun to learn more about other's “passages” so we thought a blog post would be one place to begin. So, in the interest of the “you go first” custom, here goes:

The short version is that the company I was working for as the VP of International Personnel was bought. For the first time in my life (at age 48), I found myself looking for a job when I didn’t already have one. In about the time it takes one to pull away from touching a hot stove I came to the conclusion that I didn’t like the way this felt at all, and the longer the search went on, the more I felt that the process was broken. What I thought ought to be a relationship based on a win-win outcome was one that felt like win-lose and very adversarial to boot.

After all, it seemed to my (then) naive way of thinking that organizations seeking senior-level talent and executives who were seeking stimulating and rewarding careers had the same goals in mind. Find the right fit for both.

Said differently, I thought that from a job seeker’s perspective, all I was asking for was the opportunity to compete for a real job at a time that was meaningful and to be treated with a reasonable degree of professional courtesy. Didn’t seem too crazy a notion at the time (and still doesn’t.)

Looking at it from the recruiter’s perspective (and having been in HR I thought I had a reasonable understanding of how that world worked), I knew I would want to be able to identify qualified candidates when I needed to, have confidentiality when needed, and not get into a fight with anyone over what “qualified” meant. That too did not seem to be a concept that was too far out of step.

So, how to try and become a Don Quixote lookalike and pick up the pieces of this broken process? The answer over time turned out to be an effort to create a community where both recruiters and senior level executives could come together in a career and business network not only with confidence but when needed, in confidence.

Reflecting on the experience, I keep thinking how very fortunate I was to have stumbled along the happenstance path of career planning and end up being able to make my living from something about which I was and continue to be passionate about to the point of obsession.

There is an old saying that I am sure most of us have often heard: “Luck: where preparation meets opportunity.” As I think about my own experience, that is a fair descriptor. In my case, I know that the 25+ years I spent in the corporate world certainly qualifies as “preparation.” What I didn’t know at the time was the “luck” was that my employer was bought and I was thrown into an uncontrollable situation. I didn’t immediately recognize the event as an opportunity.

So I am wondering what others’ experiences have been as they look back at their career over the past 20 years and what “learnings” or stories they might be willing to share in the comments section of this blog posting.

Where were you professionally 20 years ago?

Was there a pivotal event or person responsible for your leadership track?

Where are you professionally now?
As an incentive, I am willing to do this:

There was an incredibly interesting discussion that went on for several weeks recently in our General Management Roundtable. The discussion came from a member who was about to take on his first role as a CEO. His question to the roundtable was “What advice would you have for me?”

So rich was this discussion that Lauryn and her team created a whitepaper, Lessons from Leaders: Advice for a First-time CEO. Whether you are aspiring to be the CEO or already in the big chair, advice contained in this paper is something that any of us in a leadership position would find of real value.

You can give as many or few details as you feel comfortable, and as long as I have your email address, a copy is yours. If you are too much of an introvert to post it here, you can email it to me at

Sunday, June 15, 2008

Father's Day 2008

Anyone who follows this blog (meaning mostly my kids and some relatives who might be having a slow day) will know that I think many of the posts by G.L. Hoffman, the CEO and Chairman of a site called JobDig, are pretty neat. Common sense delivered sometimes with a sense of humor and other times with a serious message. His blog is called What Would Dad Say.

While it is still the graduation season and on this father's day, when we are reminded of our relationships with our own parents as well as our children, it reminded me of a quote that GL borrowed in a post some weeks ago in which John Qunicy Adams' mother Abigail wrote to her son explaining why it was important that he go with his father to France. It is powerful message all by itself and knowing what we know today, it becomes even more powerful:

“These are the times in which a genius would wish to live. It is not in the still calm of life, or the repose of a pacific station, that great characters are formed. The habits of vigorous mind are formed in contending with difficulties. Great necessities call out great virtues. When a mind is raised, and animated by scenes that engage the heart, then those qualities which would otherwise lay dormant, wake into life and form the character of the hero and the statesman.”
….from the Pullitzer Prize-winning book, John Adams, by David McCullough [Fabulous book and PBS series by the way]

John Adams lived long enough to see the results of the value system taught his son by Abigail and himself. Tim Russert as we all know by now, didn't.

But for those of us who are fathers, mother's or simply responsible for raising a child, I suggest that if you did not see today's edition of Meet the Press, it's well worth watching if only to hear, in Russert's own words, what it means to be not just a father, but a parent.

You will be better for it.

Monday, June 09, 2008

Hard Roads Ahead

Like many of you, some of what I read on the Op Ed pages of the NY Times I buy into and some I don't, but rarely do I find the columns uninteresting.

Indeed, whether I agree with what I am reading or not, the columns of people like Tom Friedman, Maureen Dowd, William Kristol, David Brooks and Bob Herbert all continually drive home to me the value of education.

The ability of these writers, not to mention thousands of others whose have been fortunate enough to gain an excellent education have been blessed with being able to refine the gift of communication in writing, and not just the ability to "communicate", but to do so in ways that are both very powerful and often equally as persuasive.

A recent piece by Herbert which he called Hard Roads Ahead really caught my attention because he was writing about a subject on which I have commented here on a number of occasions, and probably will again as I believe it is the most serious issue we face, and heaven only knows we don't lack for issues competing for the top spot, but my vote still goes to the state of public education.

In the article, Mr. Herbert quotes from a book by Robert Wise. The book is called "Raising the Grade: How High School Reform Can Save Our Youth and Our Nation." Wise said:

International comparisons rank the United States a stunningly unimpressive eighteenth for high school graduation rate, a lackluster ranking of fifteenth for high school reading assessments among 15-year olds in developed countries, and an embarrassing 25th for high school math.
The column goes on to point out, again using Wise as the source, that in 1995 the U.S. was second in the world (New Zealand was first) in the graduation rate from four year colleges, and even though as a country, we have increased our percentages, we now rank 15th because of how rapidly others in the world have progressed.

The results? One example pointed to was the fact that the CEO of AT&T, Randall Stephenson, has said that the company has had real problems trying to find enough skilled workers to handle 5,000 customer-service jobs that the company had promised to bring back from overseas.

In a prior life I spent five years working for a city as the Director of Labor Relations. At the time I was too young to realize what the heck I had gotten myself into, but it turned out to be a memorable experience and education on several levels to say the least.

When I left the public sector and returned to the corporate world, I took away two key "learnings." One was the importance of leadership, and the second was a belief that when it came to really solving many fundamental issues facing us all, that it would have to be business not government that would have to lead the way.

Given the track record of both of late, it doesn't feel like much of a choice, but to borrow once again from the column, I thought the last quote from Wise said it very powerfully indeed:

"The best economic stimulus package is a diploma."

Thursday, June 05, 2008

The Value of Networks

Kevin Wheeler has another of his insightful posts on ERE today which caught my attention for a couple of reasons: (1) his name was attached to it, and (2) he was talking about what brings real value to a network, the latter, of course, being not only close to my heart, but part of what we feel is a major part of our DNA here at ExecuNet.

Certainly the entire article is worth reading for sure, but as you might well have guessed already, one of the key points he makes is that that all too often people (and in this case he is talking about recruiters, but the concept applies equally as well to anyone no matter what their profession) is that like anything else in life, it really is far more about quality than quantity, or as he puts it in part:

"They judge themselves and others as "successful" by how many people are in their network."
Surprise, surprise? Not!

Of course Kevin is right as I would guess most readers know based on their own life experiences, irrespective of their professional lives.

What continues to amaze me however, even after all these years is that even though I think most people understand this on an intellectual level, there are still those who feel that collecting names electronically or physically is as Kevin says about quantity not quality. In some cases it starts to sound like the LinkedIn Olympics.

This, of course, is not to say that LI is not a valuable resource, it most certainly is, but the gathering of thousands of names from the 15 million profiles or whatever it is these days be it on LI or one of the other "social networks" does not translate to a network that is really meaningful on a personal level.

When it comes to the care and feeding of a real network and most especially one which has to do with helping to maintain or advance and enhance one's professional career, it's not about numbers as such, it's about relationships that have been built over time so that when your name comes up, the words that flash across people's minds are descriptors such as: trust, respect, insightful, helpful, bright, responsive, and supportive and/or a long list of other adjectives that any of us could add.

So, if you are going to use numbers as a metric in terms of your network, I would count words, not names.

Monday, June 02, 2008

Easy Come Easy Go?

Easy come, easy go - a phrase most of us have heard all our lives, and there are a number of situations where I suppose it might apply, but when it comes to hiring and retaining talent these days, it is not something most companies want and certainly don't want to encourage.

Yet, if you look at the numbers from any number of sources, including ExecuNet's, the time that employees remain at the same company keeps dropping. Last year in our Executive Job Market Intelligence Report respondents reported they were with their last company an average of 3.4 years. This year's survey dropped to 3.2, and when we asked about industry, this year they said it was 4.2 and that is down from 5.0 in 2005.

The point being that when you come across companies that are doing really innovative stuff that goes well beyond the lip service paid by all too many organizations, it gets your attention for sure.

Bill Taylor is probably a name that is known to many readers, especially if you are a fan of FastCompany. He was a co-founder of the magazine along with Alan Webber. Bill is also the author of a business must read called Mavericks at Work. Taylor also blogs for Harvard Business Publishing.

In a recent post, he waxes ecstatic (as well he should have) over what he found when he went to visit the online shoe superpower Zappos. I am not going to spoil the article for you by parroting back all of the neat stuff they do there, besides, Taylor says it far better than I could anyway.

I will, however, share one tid bit that will give you some idea of the degree to which the company works to make sure that those they hire really want to stay and are as customer service obsessive as the company culture dictates.

The company like many others has an extensive training program for new employees, but about a week into theirs, Zappos offers any new employee $1,000 if they wish to leave the program. Some do, but the company feels that by offering this sort of "bribe" it helps them to retain those who really do "get it." Cool move.

This practice also, I think, does something else. It helps to deliver the message that they want their employees to really feel they are not just a part of the enterprise, but a really important part, and while obviously loyalty to any organization is an accumulation of many factors, including old standbys like compensation and benefits, but step #1 is people need to feel valued.