When a UK insurance company is plagued with a securities fraud scandal that results in the ouster of the CEO, the head of human resources seizes the opportunity to shake up the culture with a bold replacement. But the chairman of the board is uncomfortable with that strategy, preferring to focus on candidates of a more traditional stamp. How far can - and should - the HR director go to influence the high-stakes appointment? Three experts comment on this fictional case study in R0911B and R0911Z. CIPD's Vanessa Robinson acknowledges that the HR director has painted herself into a corner by making her case to the board chairman first. To get out, she needs to gather hard data to bolster her argument and demonstrate in business terms the downsides of maintaining the status quo. Debating the relative merits of various CEO candidates is fiddling while Rome burns, says Richard Hermon-Taylor, a management consultant. The company is in jeopardy of imploding, and the search for a new CEO could take weeks or months. The board chairman must take swift action: He should form a special committee to deal with the crisis, retain independent forensic accountants and counsel, announce the appointment of an interim CEO, and develop a communications program to reassure employees, investors, and customers. Charu G. Raheja, an assistant professor of finance at Wake Forest University, warns that the HR director is treading on thin ice. As corporate monitors and advisers to top management, directors must respect one other, the chairman, and, eventually, the new CEO. If that respect is compromised, serious problems can result.
When a UK insurance company is plagued with a securities fraud scandal that results in the ouster of the CEO, the head of human resources seizes the opportunity to shake up the culture with a bold replacement. But the chairman of the board is uncomfortable with that strategy, preferring to focus on candidates of a more traditional stamp. How far can - and should - the HR director go to influence the high-stakes appointment? Three experts comment on this fictional case study in R0911B and R0911Z. CIPD's Vanessa Robinson acknowledges that the HR director has painted herself into a corner by making her case to the board chairman first. To get out, she needs to gather hard data to bolster her argument and demonstrate in business terms the downsides of maintaining the status quo. Debating the relative merits of various CEO candidates is fiddling while Rome burns, says Richard Hermon-Taylor, a management consultant. The company is in jeopardy of imploding, and the search for a new CEO could take weeks or months. The board chairman must take swift action: He should form a special committee to deal with the crisis, retain independent forensic accountants and counsel, announce the appointment of an interim CEO, and develop a communications program to reassure employees, investors, and customers. Charu G. Raheja, an assistant professor of finance at Wake Forest University, warns that the HR director is treading on thin ice. As corporate monitors and advisers to top management, directors must respect one other, the chairman, and, eventually, the new CEO. If that respect is compromised, serious problems can result.
When a UK insurance company is plagued with a securities fraud scandal that results in the ouster of the CEO, the head of human resources seizes the opportunity to shake up the culture with a bold replacement. But the chairman of the board is uncomfortable with that strategy, preferring to focus on candidates of a more traditional stamp. How far can - and should - the HR director go to influence the high-stakes appointment? Three experts comment on this fictional case study in R0911B and R0911Z. CIPD's Vanessa Robinson acknowledges that the HR director has painted herself into a corner by making her case to the board chairman first. To get out, she needs to gather hard data to bolster her argument and demonstrate in business terms the downsides of maintaining the status quo. Debating the relative merits of various CEO candidates is fiddling while Rome burns, says Richard Hermon-Taylor, a management consultant. The company is in jeopardy of imploding, and the search for a new CEO could take weeks or months. The board chairman must take swift action: He should form a special committee to deal with the crisis, retain independent forensic accountants and counsel, announce the appointment of an interim CEO, and develop a communications program to reassure employees, investors, and customers. Charu G. Raheja, an assistant professor of finance at Wake Forest University, warns that the HR director is treading on thin ice. As corporate monitors and advisers to top management, directors must respect one other, the chairman, and, eventually, the new CEO. If that respect is compromised, serious problems can result.
Astrigo is in trouble. The home improvement chain has missed its earnings forecast badly and sales are falling. A 10% reduction in staff looks like the only choice. Layoffs, however, would undermine the retailer's longtime commitment to employees and the ability to provide its famed customer service. But tapping cash reserved for strategic acquisitions goes against the firm's values, too. What should the CEO do? Four experts comment on this fictional case study in R0903A and R0903Z. Board advisers Laurence J. Stybel and Maryanne Peabody, of Stybel Peabody Lincolnshire, suggest that the company borrow a page from McDonald's and declare Astrigo's intention to focus on the interests of long-term shareholders. This move would establish a framework that would help management make tactical decisions with more clarity and flexibility. The company could then use its cash to buy a little time to study the options. If Astrigo can't avoid layoffs, a last-in, first-out approach would be the least costly. Former CEO Jurgen Dormann understands the challenge Astrigo faces. When he took over ABB, the company was in deep distress. After shaking up his executive committee, Dormann personally reached out to all 180,000 employees to enlist their help. They came back with ideas that saved $1.6 billion - and rescued the company. Management professor Robert I. Sutton thinks too many executives assume that layoffs are the best way to reduce costs. They don't factor in how long it takes to realize the savings from job cuts, the costs to hire and train people once business picks up, or the damage to morale and productivity. Astrigo's executives should consider alternatives such as pay cuts, reduced benefits, unpaid time off, and incentives for departure. If layoffs are in-evitable, Astrigo should do them quickly, and firing the bottom 10% of employees would be the worst approach.
Astrigo is in trouble. The home improvement chain has missed its earnings forecast badly and sales are falling. A 10% reduction in staff looks like the only choice. Layoffs, however, would undermine the retailer's longtime commitment to employees and the ability to provide its famed customer service. But tapping cash reserved for strategic acquisitions goes against the firm's values, too. What should the CEO do? Four experts comment on this fictional case study in R0903A and R0903Z. Board advisers Laurence J. Stybel and Maryanne Peabody, of Stybel Peabody Lincolnshire, suggest that the company borrow a page from McDonald's and declare Astrigo's intention to focus on the interests of long-term shareholders. This move would establish a framework that would help management make tactical decisions with more clarity and flexibility. The company could then use its cash to buy a little time to study the options. If Astrigo can't avoid layoffs, a last-in, first-out approach would be the least costly. Former CEO Jurgen Dormann understands the challenge Astrigo faces. When he took over ABB, the company was in deep distress. After shaking up his executive committee, Dormann personally reached out to all 180,000 employees to enlist their help. They came back with ideas that saved $1.6 billion - and rescued the company. Management professor Robert I. Sutton thinks too many executives assume that layoffs are the best way to reduce costs. They don't factor in how long it takes to realize the savings from job cuts, the costs to hire and train people once business picks up, or the damage to morale and productivity. Astrigo's executives should consider alternatives such as pay cuts, reduced benefits, unpaid time off, and incentives for departure. If layoffs are in-evitable, Astrigo should do them quickly, and firing the bottom 10% of employees would be the worst approach.
Astrigo is in trouble. The home improvement chain has missed its earnings forecast badly and sales are falling. A 10% reduction in staff looks like the only choice. Layoffs, however, would undermine the retailer's longtime commitment to employees and the ability to provide its famed customer service. But tapping cash reserved for strategic acquisitions goes against the firm's values, too. What should the CEO do? Four experts comment on this fictional case study in R0903A and R0903Z. Board advisers Laurence J. Stybel and Maryanne Peabody, of Stybel Peabody Lincolnshire, suggest that the company borrow a page from McDonald's and declare Astrigo's intention to focus on the interests of long-term shareholders. This move would establish a framework that would help management make tactical decisions with more clarity and flexibility. The company could then use its cash to buy a little time to study the options. If Astrigo can't avoid layoffs, a last-in, first-out approach would be the least costly. Former CEO Jurgen Dormann understands the challenge Astrigo faces. When he took over ABB, the company was in deep distress. After shaking up his executive committee, Dormann personally reached out to all 180,000 employees to enlist their help. They came back with ideas that saved $1.6 billion - and rescued the company. Management professor Robert I. Sutton thinks too many executives assume that layoffs are the best way to reduce costs. They don't factor in how long it takes to realize the savings from job cuts, the costs to hire and train people once business picks up, or the damage to morale and productivity. Astrigo's executives should consider alternatives such as pay cuts, reduced benefits, unpaid time off, and incentives for departure. If layoffs are in-evitable, Astrigo should do them quickly, and firing the bottom 10% of employees would be the worst approach.
During his nearly 14 years at the helm of networking giant Cisco Systems, Chambers has developed an uncanny ability to sense market trends long before others do. He predicted, for instance, that voice transmission would become free long before computer networks could even carry it. And Cisco was one of the first to shift from call centers to web-based customer service. Seeing the future is essential for a company that must start developing a product some six years before it goes to market. How does Chambers do it? He looks for what he calls "market transitions" - subtle social, economic, or technological signs of an impending disruptive shift - which, he says, start turning up five to seven years before the market actually grasps their significance. The move to open-source software development was one that Chambers saw and Microsoft did not. Early on, Chambers learned to sense market transitions by listening closely to customers, connecting individual dots of behavior into patterns that indicated future trends. Later, he realized he needed to turn Cisco's management processes upside down to benefit from that foresight. In this interview, Chambers describes how he was able to surrender his role as a command-and-control CEO and institute a collaborative decision-making model that allows the company to respond speedily to emerging transitions. Managers throughout Cisco now form cross-functional teams, working together to identify and exploit new opportunities quickly. The model allows Cisco to simultaneously implement 22 major sales initiatives as effectively as most companies do one or two.
Mark Landstad, relatively new to CliffBank's investment banking division, has a veteran teammate, Nicole Collins, who appears to be a reliable ally. However, when Mark needs her help in locating vital information for his part of a presentation they will be doing together, she feigns ignorance. During the meeting, Nicole produces the data out of the blue and wows the attendees with her analysis. Knocked off balance by the sabotage, Mark clumsily seeks advice from his boss, who is a brick wall when it comes to interpersonal dynamics. How should Mark deal with his backstabbing colleague? Three experts comment on this fictional case study in R0811A and R0811Z. Maggie Craddock, president of Workplace Relationships, classifies Mark as an anxious pleaser, one of four power styles identified by her firm's research. She surmises that Mark is actually sabotaging himself and recommends that he address his dilemma by first examining his own modus operandi. R. Dixon Thayer, former CEO of I-trax and himself once the victim of coworker sabotage, has empathy for Mark. However, he criticizes Mark's hasty, open-ended way of approaching his superior. Thayer lists four "rules for boss engagement" that Mark should follow, beyond proving that his sneaky colleague won't stop him from getting results at CliffBank. Deborah Kolb, of the Simmons School of Management, contends that Mark does not yet understand his division's culture well enough to know whether Nicole's behavior is the rule or the exception. Only by overcoming his political and interpersonal naivete, she argues, can he learn how to negotiate relationships in his new setting.
Mark Landstad, relatively new to CliffBank's investment banking division, has a veteran teammate, Nicole Collins, who appears to be a reliable ally. However, when Mark needs her help in locating vital information for his part of a presentation they will be doing together, she feigns ignorance. During the meeting, Nicole produces the data out of the blue and wows the attendees with her analysis. Knocked off balance by the sabotage, Mark clumsily seeks advice from his boss, who is a brick wall when it comes to interpersonal dynamics. How should Mark deal with his backstabbing colleague? Three experts comment on this fictional case study in R0811A and R0811Z. Maggie Craddock, president of Workplace Relationships, classifies Mark as an anxious pleaser, one of four power styles identified by her firm's research. She surmises that Mark is actually sabotaging himself and recommends that he address his dilemma by first examining his own modus operandi. R. Dixon Thayer, former CEO of I-trax and himself once the victim of coworker sabotage, has empathy for Mark. However, he criticizes Mark's hasty, open-ended way of approaching his superior. Thayer lists four "rules for boss engagement" that Mark should follow, beyond proving that his sneaky colleague won't stop him from getting results at CliffBank. Deborah Kolb, of the Simmons School of Management, contends that Mark does not yet understand his division's culture well enough to know whether Nicole's behavior is the rule or the exception. Only by overcoming his political and interpersonal naivete, she argues, can he learn how to negotiate relationships in his new setting.
The historian David McCullough, a two-time Pulitzer Prize winner and well-known public television host, has spent his career thinking about the qualities that make a leader great. His books, including Truman, John Adams, and 1776, illustrate his conviction that even in America's darkest moments the old-fashioned virtues of optimism, hard work, and strength of character endure. In this edited conversation with HBR senior editor Bronwyn Fryer, McCullough analyzes the strengths of American leaders past and present. Of Harry Truman he says, "He wasn't afraid to have people around him who were more accomplished than he, and that's one reason why he had the best cabinet of any president since George Washington....He knew who he was." George Washington--"a natural born leader and a man of absolute integrity"--was unusually skilled at spotting talent. Washington Roebling, who built the Brooklyn Bridge, led by example: He never asked his people to do anything he wouldn't do himself, no matter how dangerous. Franklin Roosevelt had the power of persuasion in abundance. If McCullough were teaching a business school leadership course, he says, he would emphasize the importance of listening--of asking good questions but also noticing what people don't say; he would warn against "the insidious disease of greed"; he would encourage an ambition to excel; and he would urge young MBAs to have a sense that their work matters and to make their good conduct a standard for others.
Business leadership has become synonymous in the public eye with unethical behavior. Widespread scandals, massive layoffs, and inflated executive pay packages have led many to believe that corporate wrongdoing is the status quo. That's why it's more important than ever that those at the top mend relationships with customers, employees, and other stakeholders. Professor Gardner has spent many years studying the relationship between psychology and ethics at Harvard's Graduate School of Education. In this interview with HBR senior editor Bronwyn Fryer, Gardner talks about what he calls the ethical mind, which helps individuals aspire to do good work that matters to their colleagues, companies, and society in general. In an era when workers are overwhelmed by too much information and feel pressured to win at all costs, Gardner believes, it's easy to lose one's way. What's more, employees look to leaders for cues as to what's appropriate and what's not. So if you're a leader, what's the best way to stand up to ethical pressures and set a good example? First and foremost, says Gardner, you must believe that retaining an ethical compass is essential to the health of your organization. Then you must state your ethical beliefs and stick to them. You should also test yourself rigorously to make sure you're adhering to your values, take time to reflect on your beliefs, find multiple mentors who aren't afraid to speak truth to your power, and confront others' egregious behavior as soon as it arises. In the end, Gardner believes, the world hangs in the balance between right and wrong, good and bad, success and disaster. "You need to decide which side you're on," he concludes, "and do the right thing."
Companies today glorify the executive who logs 100-hour workweeks, the road warrior who lives out of a suitcase in multiple time zones, and the negotiator who takes a red-eye to make an 8 a.m. meeting. But to Dr. Charles A. Czeisler, the Baldino Professor of Sleep Medicine at Harvard Medical School, this kind of corporate behavior is the antithesis of high performance. In fact, he says, it endangers employees and puts their companies at risk. In this interview, Czeisler describes four neurobiological functions that affect sleep duration and quality as well as individual performance. When these functions fall out of alignment because of sleep deprivation, people operate at a far lower level of performance than they would if they were well rested. Czeisler goes on to observe that corporations have all kinds of policies designed to protect employees--rules against smoking, sexual harassment, and so on--but they push people to the brink of self-destruction by expecting them to work too hard, too long, and with too little sleep. The negative effects on cognitive performance, Czeisler says, can be similar to those that occur after drinking too much alcohol: "We now know that 24 hours without sleep or a week of sleeping four or five hours a night induces an impairment equivalent to a blood alcohol level of .1%. We would never say, 'This person is a great worker! He's drunk all the time!' yet we continue to celebrate people who sacrifice sleep for work." Czeisler recommends that companies institute corporate sleep policies that discourage scheduled work beyond 16 consecutive hours as well as working or driving immediately after late-night or overnight flights. A sidebar to this article summarizes the latest developments in sleep research.
Sid Shawn is a 10-year veteran of NMO Financial Services and a mainstay of the pensions marketing group. He's been a good, consistent worker and an invaluable resource for the salespeople and consultant relations managers. Sid also weighs 400 pounds. So when he is the only internal candidate for the customer-facing position of consultant relations manager, sales and marketing VP Bill Houglan feels that he has a tough hiring decision to make. Sid knows the company's products backward and forward, but to succeed in the new job, he would have to impress the polished professionals at major benefits consultancies. What kind of image would Sid present in face-to-face sales situations? Could he keep up with the job's physical demands and fast pace? Does Sid's weight matter? Bill wonders. With obesity reaching epidemic proportions in the United States, companies are feeling its impact on their insurance costs and their employees' health. They are increasingly compelled to adopt policies concerning overweight workers. Commenting on this fictional case study in R0505A and R0505Z are Howard Weyers, CEO of Weyco, which has fired employees for smoking and is now targeting the issue of obesity at work; Sondra Solovay, a California attorney focusing on weight-related issues and the author of Tipping the Scales of Justice: Fighting Weight-Based Discrimination; Mark V. Roehling, a Michigan State University professor whose research has focused on issues of obesity in the workplace; and Amy Wilensky, author of The Weight of It: A Story of Two Sisters.
Sid Shawn is a 10-year veteran of NMO Financial Services and a mainstay of the pensions marketing group. He's been a good, consistent worker and an invaluable resource for the salespeople and consultant relations managers. Sid also weighs 400 pounds. So when he is the only internal candidate for the customer-facing position of consultant relations manager, sales and marketing VP Bill Houglan feels that he has a tough hiring decision to make. Sid knows the company's products backward and forward, but to succeed in the new job, he would have to impress the polished professionals at major benefits consultancies. What kind of image would Sid present in face-to-face sales situations? Could he keep up with the job's physical demands and fast pace? Does Sid's weight matter? Bill wonders. With obesity reaching epidemic proportions in the United States, companies are feeling its impact on their insurance costs and their employees' health. They are increasingly compelled to adopt policies concerning overweight workers. Commenting on this fictional case study in R0505A and R0505Z are Howard Weyers, CEO of Weyco, which has fired employees for smoking and is now targeting the issue of obesity at work; Sondra Solovay, a California attorney focusing on weight-related issues and the author of Tipping the Scales of Justice: Fighting Weight-Based Discrimination; Mark V. Roehling, a Michigan State University professor whose research has focused on issues of obesity in the workplace; and Amy Wilensky, author of The Weight of It: A Story of Two Sisters.
Sid Shawn is a 10-year veteran of NMO Financial Services and a mainstay of the pensions marketing group. He's been a good, consistent worker and an invaluable resource for the salespeople and consultant relations managers. Sid also weighs 400 pounds. So when he is the only internal candidate for the customer-facing position of consultant relations manager, sales and marketing VP Bill Houglan feels that he has a tough hiring decision to make. Sid knows the company's products backward and forward, but to succeed in the new job, he would have to impress the polished professionals at major benefits consultancies. What kind of image would Sid present in face-to-face sales situations? Could he keep up with the job's physical demands and fast pace? Does Sid's weight matter? Bill wonders. With obesity reaching epidemic proportions in the United States, companies are feeling its impact on their insurance costs and their employees' health. They are increasingly compelled to adopt policies concerning overweight workers. Offering expert advice on this fictional case study in R0505A and R0505Z are Howard Weyers, CEO of Weyco, which has fired employees for smoking and is now targeting the issue of obesity at work; Sondra Solovay, a California attorney focusing on weight-related issues and the author of Tipping the Scales of Justice: Fighting Weight-Based Discrimination; Mark V. Roehling, a Michigan State University professor whose research has focused on issues of obesity in the workplace; and Amy Wilensky, author of The Weight of It: A Story of Two Sisters.
George Latour considers himself a good leader. As CEO of Retronics, Latour has a mandate to grow revenues with an eye toward taking the software engineering firm public by 2006. At the behest of the chairman of the board, he has hired a new marketing director, Shelley Stern--"a thoroughbred" who, the chairman insists, just needs a little training in the business. Latour does his best to bring his new hire up to speed. He has Stern sit in on developers' meetings and accompany the sales force on client calls. He takes pains to help her correctly position marketing and press materials. But Stern never seems really to take the bit. In fact, Stern considers Latour's hands-on management style oppressive, and she's dreadfully unhappy. What's more, she is spread too thin. Yet, when she asks for help--if not additional staff, at least an outside contractor--Latour asks for a list of everything she's working on and tells her he'll help her prioritize. In this fictional case, a he-said, she-said debate erupts over competing management styles. In R0409A and R0409Z, four commentators--Jim Goodnight, the CEO of SAS Institute; Mark Goulston, a psychiatrist and the senior vice-president at Sherwood Partners; J. Michael Lawrie, the CEO of Siebel Systems; and Craig Chappelow, the senior manager of assessment and development resources at the Center for Creative Leadership--offer their perspectives on the problem and how to solve it.
George Latour considers himself a good leader. As CEO of Retronics, Latour has a mandate to grow revenues with an eye toward taking the software engineering firm public by 2006. At the behest of the chairman of the board, he has hired a new marketing director, Shelley Stern--"a thoroughbred" who, the chairman insists, just needs a little training in the business. Latour does his best to bring his new hire up to speed. He has Stern sit in on developers' meetings and accompany the sales force on client calls. He takes pains to help her correctly position marketing and press materials. But Stern never seems really to take the bit. In fact, Stern considers Latour's hands-on management style oppressive, and she's dreadfully unhappy. What's more, she is spread too thin. Yet, when she asks for help--if not additional staff, at least an outside contractor--Latour asks for a list of everything she's working on and tells her he'll help her prioritize. In this fictional case, a he-said, she-said debate erupts over competing management styles. In R0409A and R0409Z, four commentators--Jim Goodnight, the CEO of SAS Institute; Mark Goulston, a psychiatrist and the senior vice-president at Sherwood Partners; J. Michael Lawrie, the CEO of Siebel Systems; and Craig Chappelow, the senior manager of assessment and development resources at the Center for Creative Leadership--offer their perspectives on the problem and how to solve it.
George Latour considers himself a good leader. As CEO of Retronics, Latour has a mandate to grow revenues with an eye toward taking the software engineering firm public by 2006. At the behest of the chairman of the board, he has hired a new marketing director, Shelley Stern--"a thoroughbred" who, the chairman insists, just needs a little training in the business. Latour does his best to bring his new hire up to speed. He has Stern sit in on developers' meetings and accompany the sales force on client calls. He takes pains to help her correctly position marketing and press materials. But Stern never seems really to take the bit. In fact, Stern considers Latour's hands-on management style oppressive, and she's dreadfully unhappy. What's more, she is spread too thin. Yet, when she asks for help--if not additional staff, at least an outside contractor--Latour asks for a list of everything she's working on and tells her he'll help her prioritize. In this fictional case, a he-said, she-said debate erupts over competing management styles. In R0409A and R0409Z, four commentators--Jim Goodnight, the CEO of SAS Institute; Mark Goulston, a psychiatrist and the senior vice-president at Sherwood Partners; J. Michael Lawrie, the CEO of Siebel Systems; and Craig Chappelow, the senior manager of assessment and development resources at the Center for Creative Leadership--offer their perspectives on the problem and how to solve it.