Saturday, January 30, 2010

Napoleon Hill on the iPad

Am I the only editor in all of publishing who has not printed something, anything at all, over the past month about Apple's iPad, which was finally unveiled this week? Maybe so. My media compatriots certainly got feverish in their coverage about the "coming down from the mount" of Steve Jobs's new tablet computer.

Well, this editor doesn't want be thought of as a total nihilist about new technology, so let us go ahead and put our "Boards At Their Best" two cents in. To wit: What would Napoleon Hill have to say about the iPad?

Napoleon Hill is the renowned author of the mega-inspirational (and mega-selling) Think and Grow Rich (pictured here in 1937 holding his famous book). A close reading of his life shows that he is a big idea kind of guy.

Is the iPad really the big idea that it has been made out to be in the breathless coverage? In a book published last year, Napoleon Hill's Golden Rules: The Lost Writings (John Wiley & Sons), Hill rendered his verdict on what makes a big idea:

"One big idea is all that any person really needs or can make use of in this life. Too many of us go through life with plenty of little ideas clinging to us, but with no really big idea.

"When you find your big idea, more likely than not you will find it in some sort of service that will be of constructive help to your fellowmen. It may be the idea of lowering the cost to the consumer of some necessity of life; or, it may be the idea of helping men and women to be more cheerful and happy in their work by creating some plan for improving their working environment. If it doesn't promise some of these results, you may be reasonably sure that it is not a big idea."

One analyst seems to be smack dab in Hill's camp when he told the Wall Street Journal that for the iPad to be successful "it has to fit into the user's daily life." Silicon Valley Insider, one of my favorite blogs about technology, seems to think this is exactly what will happen when you read this conclusion.

And yet . . . along with the praise has come a fair amount of scorn by product analysts. No need to go into the pros and cons of the iPad's capabilities. All we'll conclude here in our little corner of blogdom on leadership insights is this: a close reading of Napoleon Hill's specs for a big idea makes one skeptical that he would regard the iPad as meeting that designation.

Wednesday, January 27, 2010

On Hiring Your 'Man in Washington'

The State of the Union address is soon to start as I sit down to write this. Whatever the President has to say tonight, we can be certain that the future holds even more government involvement in the life of the corporation and its people, from the C-suite on down to the shop floor (are there any shop floors left?).

Here is a terrific tip for corporate management thinking about how to protect or advance their interests in Washington. It comes from John Endean (pictured), president of the D.C.-based American Business Conference, a coalition of CEOs of midsized companies.

Hire the right person to represent you, Endean advises. As he explains:

"Companies with government affairs offices typically hire people from the Hill or a relevant regulatory agency to run them. Very few of these people dream of a corner office at headquarters, and that disinterest in advancing within the company can be a problem. It makes sense to assign bright executives within the company to head the D.C. office, similar to the way many companies tap their best and brightest for overseas assignments. A tour of duty in Washington would endow operating executives with political experience — a desirable skill in this environment — while insuring that the interests of the company are intelligently and fully represented by someone whose career path depends upon it."

That is an excellent piece of advice — a smart combination of a management development and regulatory affairs strategy — from a man well-versed in Washington's ways. I first heard John give a superb briefing on whether and how to get more active in Washington to the annual board meeting of the SEI Center for Advanced Studies in Management at the Wharton School last fall. I asked him to write up his above tip and several others that he offered into an article that will be published in the First Quarter 2010 edition of Directors & Boards. That issue will hit the streets in February.

Anyone doubt that President Obama will tonight with his State of the Union address make John's article an even more urgent read?

Sunday, January 24, 2010

A Management Guru You Never Heard Of

In the Catholic Church we have our holy men and women who, because of their distinguished lives and devotion to the faith, have been designated saints. These saints have "feast days" on which their life is remembered and celebrated. Today is the feast day of one such holy man, St. Francis de Sales (1567-1622).

St. Francis de Sales holds a special place for me as he is considered to be the patron saint of authors and journalists. He was one of the Church's famed scholars and communicators. One tale is that in his early days as a preacher he wrote out his sermons, copied them by hand, and slipped them under the doors of those he was sent to minister to — "the first record of religious tracts being used to communicate with people." Another biography records that "His style was so simple that it charmed his hearers, and, excellent scholar though he was, he avoided filling his sermons with Greek and Latin quotations, as was the prevailing custom." His most famous book, Introduction to the Devout Life, written in 1608, grew out of a series of casual notes and advice that he had written which he was then persuaded to publish; it apparently achieved instant acclaim as a masterpiece and became a "must read" for its day all over Europe.

I figure St. Francis de Sales was the management guru of his times. For many years I had the following two of his tips for mastering the pressures of one's job pasted within easy daily eyeballing of my workspace:

• "Undertake all of your duties with a calm mind and try to do them one at a time. If you try to do them all at once, or without order, your spirits will be so overcharged and depressed that they will likely sink under the burden and nothing will be done."

• "The occasions for great gains come but rarely, but of little gains many can be made each day; and by managing these little gains with judgment, there are some who grow rich. Oh, how holy and rich in merits we should make ourselves if we but knew how to profit by the opportunities which our vocation supplies to us."

Another connection I have with this church leader: two of the happiest years of my childhood were spent living and going to school in the St. Francis de Sales parish in Philadelphia. And did I mention that I have a portrait of him hanging in my office?

We all seek inspiration from many sources. This patron saint of journalists is one of mine. This is one management guru worth knowing about. I am happy to have this opportunity to introduce him to you and to celebrate his life today.

Monday, January 18, 2010

On MLK Day: 'The Five Laws of Stratospheric Success'

In the spirit of Martin Luther King Day as a day of service, I am moved to share a methodology for success based on generosity of spirit and action. It comes from the book The Go-Giver, which was published in 2008 by Portfolio and, in its first year, sold more than 120,000 copies, becoming a Wall Street Journal and BusinessWeek bestseller. The Go-Giver is a business parable that teaches the power of generosity; it has a simple but powerful message — that giving is the most fulfilling and effective path to success.

Here from The Go-Giver are what the authors, Bob Burg and John David Mann, present as the "Five Laws of Stratospheric Success." As you read these, see how they certainly apply to corporate directors — in how executives, driven by an ethic of service which many if not most directors are, take on such a responsible duty, and what they put themselves in position to give and, in turn, to receive:

The Law of Value: Your true worth is determined by how much more you give in value than you take in payment.

The Law of Compensation: Your income is determined by how many people you serve and how well you serve them.

The Law of Influence: Your influence is determined by how abundantly you place other people's interests first.

The Law of Authenticity: The most valuable gift you have to offer is yourself.

The Law of Receptivity: The key to effective giving is to stay open to receiving.

The authors' follow-up, Go-Givers Sell More, has just landed on my desk. The sequel adapts The Go-Giver principles specifically for people who sell daily in their jobs.

A philosophy that giving is the best way of getting is one that resonates on MLK Day. It is a philosophy that should resonate every day with every corporate director.

Thursday, January 14, 2010

No More Credit for Director Education?

In the wild takeover days of the 1980s, business columnist Dan Dorfman, who had his ear closer to the ground than anyone in picking up the M&A drumbeats, used to qualify his tips on who was about to get hit with a takeover bid with this disclaimer: "This is what I hear, not what I know."

This is what I hear: RiskMetrics Group is about to stop giving credit in its governance ratings for director education. That is, it will cease reviewing director education programs or track director attendance at what had been accredited programs, and will no longer include "Director Education" in its Corporate Governance Quotient (CGQ) scoring system for rating a company's governance.

RMG, the 800-pound gorilla in the governance ratings game, seems set to announce shortly a new tool that replaces the CGQ, one which will include variables that it considers more important than director education.

This is a significant development for all the purveyors of governance programming — think of all of the director institutes and centers for corporate governance and all their conferences and events, plus the programming conducted by service firms for director education. And it surely represents a rather monumental restatement of philosophy by RiskMetrics about how it regards the importance of director education.

My initial reaction is one of bemusement. If RMG proceeds down this path of no longer tracking and crediting director education, this seems to be a startlingly counterintuitive move.

The job of a board director is getting increasingly complex, especially in the area of enterprise risk management. This kind of environment normally is when you would want to encourage directors to avail themselves of educational opportunities to get better up to speed. If you have any kind of an orientation to increasing shareholder value through governance rigor, you don't want to be taking away incentives to growing a board member's knowledge base and competencies.

This move by RMG is what I hear. More news to come.

Saturday, January 9, 2010

A Flashback

The announcement this week of a leadership change at the J. Paul Getty Museum sparked a memory of a former leading figure in the evolution of modern-day corporate governance, Harold Williams. Williams was chairman of the Securities and Exchange Commission when I first got into the business world in the 1970s. After he stepped down as SEC chair in 1981 he became president and CEO of the J. Paul Getty Trust, a cultural and philanthropic institution that includes the museum among its operations.

When people want to know about the history of Directors & Boards, I tell them that it was founded, in 1976, during a time of great trouble in the boardroom. Corporate America was caught in the ugly glare of the foreign payoff scandals, when boards seemingly were unaware of the behavior of their managers in illegally bribing foreign agents for contracts and were oblivious to the legerdemain in the corporate accounting. (Does that last part sound familiar?) Congressional hearings ensued, and a new law was enacted — the Foreign Corrupt Practices Act.

The SEC began putting the pressure on boards to act more responsibly, and independently. The SEC had two activist chairmen in the 1970s — first with Roderick Hills and then with Harold Williams — who strongly moved the needle in the direction of boards rethinking their role, their behavior, and their composition. A new era in the evolution of corporate governance got underway.

During his reign in Washington, Williams table thumped for separating the chairman and CEO positions. Yes, a topic that is still much debated today, some 30-plus years later, was a hot subject then at the SEC and in boardrooms – maybe I should say a "hot potato."

And that's why a remembrance of Williams comes so readily to mind with the news out of the Getty organization. I am about to publish a major piece on the wisdom — or folly — of separating the chairman and CEO jobs. Look for this as the cover story in the First Quarter edition of Directors & Boards, off press next month.

In a way, this separating the roles analysis returns the journal to the era of its roots — when boards were in big trouble for improper risk management and financial oversight, when the government was making life in the boardroom less comfortable, and corporate governance was about to enter a new phase in its evolution toward independent leadership.

Thursday, January 7, 2010

'Way Too Rich'

The Wall Street Journal reports this morning that "Congress Has Hedge Funds, Buyout Firms in Tax Sights" — that the "carried interest" tax deduction that helps lessen a hedge fund manager's tax bite is back on the radar screen in a big way. The article notes how Congress tried this before in 2007 but backed off as the financial crisis deepened.

I remember that well. I was in the room back in October 2007 when Congressman Barney Frank was an early morning keynote speaker at the annual conference of the National Association of Corporate Directors. He got a big chuckle from the crowd when he told how the poohbahs from the PE firms had been descending on him to try to deflect the government's interest in changing their tax structure.

His message to the big-wheel financiers: "You guys are way too rich to be feeling so sorry for yourselves."

They did get a reprieve, but it looks like the PE guys better buck up — the curtain may be coming down on the feeling-sorry-for-themselves act.

Friday, January 1, 2010

Broader Shoulders for 2010

Happy New Year! Are you feeling a sense of relief? Of how better it might be now that we're seeing 2009 in the rearview mirror?

If the economy can rebound, perhaps 2010 won't be the 'Byrom-esque' year for board members that 2009 was (see my blog post of Dec. 31). But there has been so much damage done to investors from boards' faulty risk oversight that one should not expect this coming year to be a cakewalk for directors. Institutional investors will press forward with their incursions into the boardroom — say on pay and proxy access petitions — and politicians will certainly support such drives with enabling legislation. Global competition will not lighten up. Nor will the need lessen to develop and recruit the best talent available, from the corner office on down.

So, what will it take to be a director in 2010?

I am reminded of something my close colleague Jeffrey Sonnenfeld once shared with an audience of CEOs and directors. Jeff runs the Yale CEO Leadership Summit, a distinctive convocation of top leaders from business, government, not-for-profit, and academia. (If you have the good fortune to be invited to this semiannual gathering, do attend.) At one summit, when the troubles being wrestled with seemed too imposing, even to all the hard-charging execs in the room, Jeff reminded us of an old Jewish saying:

"I ask not for a lighter burden; I ask for broader shoulders."

Directors' burdens are not going to get any lighter in 2010, so don't pray for that. It will still take courage to be on a board and to accept a board invitation. Pray that you have the broader shoulders to bear this vital duty.