Not one share do you hand over
From The Narrow Road by Felix Dennis. Copyright ©2010 by the author. Published by Portfolio, a member of Penguin Group (USA) Inc. (www.penguin.com).
To become rich you must be an owner. And you must try to own it all. You must strive with every fiber of your being to retain control of as near to 100 percent of any company you can. That is the dirty, rotten little secret of it all.
To become rich, every single percentage point of anything you own is crucial. It is worth fighting for. It is worth suing for. It is worth shouting and banging on the table for. It is worth begging for and groveling for. It is worth lying and cheating for. In extremis, it is even worth negotiating for.
Never hand over a single share of anything you have acquired or created if you can help it. Not one share, no matter what the reason — not for loyalty, not for fairness, not as an incentive — unless you genuinely have to. (Shares as an incentive rarely work in any case; there are far better ways to motivate employees.)
Nothing counts but what you own in the race to get rich. If you haven't much skill, or much wit, or much talent, or much luck, and yet you insist on owning more than your fair share of any start-up or acquisition, then you can become rich.
If you choose to forget or to ignore everything else in this book, just retain this: Ownership isn't the most important thing in the getting of money — it is the only thing.
Felix Dennis is the founder of Dennis Publishing and of Maxim, one of the most successful magazines of the last decade. Before starting his publishing company, he was involved in many other entrepreneurial ventures (www.felixdennis.com).
Anne Mulcahy: It's all about staying focused
From No Fear of Failure by Gary Burnison. Copyright ©2011 by Korn/Ferry International. Published by Jossey-Bass, a Wiley imprint (www.josseybass.com).
As CEOs well know, with so many people vying for their time and attention, prioritizing can be easier said than done. But just like the captain of the team must focus first on the players, a leader's priority must be the people on whom he or she relies to carry out the strategy and produce results in the field. Asked what advice she would give to new CEOs, Xerox's Anne Mulcahy drew on this lesson learned in the midst of the battle: stay focused on the most important constituencies, as Mulcahy called them, “your people and your customers.”
“As a CEO, there is so much to worry about, so many constituencies. Focusing on customers and employees always has to be the place you measure your impact on the job. That guidance actually has made me constantly look at my calendar and move out the stuff that's peripheral and make sure that the vast majority of my time is spent on the two sets of people who actually make the place tick. It's not analysts, it's not shareholders, it's not bankers, it's not industry people, it's not competitors. It is actually your customers and your employees. They keep you market connected,” Mulcahy observed. “If you really are engaged in connecting with your employees you discover problems and opportunities early enough to do something about them. It's a powerful focus. Although it makes all the sense in the world, it's really hard to do unless you approach it in a very conscious way.”
Being resolved to stay connected with what is most important, however, often proves difficult to achieve. CEOs face a host of things that divert their attention and consume their time. For a new CEO, the pull to go in a million different directions is particularly strong.
“Business councils, business roundtables, people who want you to serve on their boards.… You've got a million things that are stretching you in different directions,” she added. “Just stay focused on the fact that if you can't spend the vast majority of your time on your customers and your employees, then you've lost your way in terms of developing priorities.”
Gary Burnison is chief executive officer of Korn/Ferry International, the world's largest executive recruiting firm, and is a member of the firm's board of directors (www.kornferryinstitute.com/nofearoffailure).
Mom's encouragement spurred Larry Bossidy
From Better Under Pressure by Justin Menkes. Copyright ©2011 by Esaress Holding Ltd. Published by Harvard Business Review Press (www.hbr.org/books).
As a psychologist who works with the world's top CEOs, I have spent the last eight years specifically studying the differences between CEOs who fail and those who have shown remarkable staying power. I've worked with companies as they vet candidates for their top positions, helping them understand the key attributes needed for a person in that position to succeed. The findings in this book are based specifically on in-depth psychological interviews conducted with dozens of CEOs from the world's largest companies, both retired legends and those considered current masters of their domain, as well as analyses of performance evaluations for more than 200 candidates being considered for chief executive roles.
Larry Bossidy, retired chairman and CEO of Honeywell, spoke about the single thing that influenced him most profoundly during his career. “I was always really afraid that I wouldn't succeed,” he told me. “I can remember on my mother's deathbed, she said, ‘Larry, fulfill your potential.' She did a lot of great things for me over my life, but I've never forgotten what she said. And that's what I was most worried about. Was I going to fulfill my potential? I didn't know what that was — certainly I didn't know I was going to be CEO for 10 years. But I just wanted to make sure that I went as far as I could. And I wanted the same for my people — for them to fulfill their potential.”
It is clear that Bossidy, who had led one of the largest companies in the world, was never immune to fear of failure. But when he was in the face of this fear, his mother encouraged him to see the intense gratification that came from rising to ever-higher levels of achievement — fulfilling his potential. He remembered this encouragement throughout his career and, in turn, he himself became legendary for his ability to teach others how to do the same. Great leaders seek to fulfill their own potential but equally seek to fulfill the potential of those who work for and with them.
Justin Menkes is a psychologist and consultant with executive search firm Spencer Stuart. With an expertise in executive assessment, he advises companies on their choice of CEO.
The collective power of small groups
From True North Groups by Bill George and Doug Baker. Copyright ©2011 by the authors. Published by Berrett-Koehler Publishers Inc. (www.bkconnection.com).
In reflecting upon our personal experiences in and with groups, we believe forming a True North Group will be one of the most important steps you take in your life. Your group can do so much to help you grow as a human being and become a more effective, more empowering leader.
In a world where the difficulties we face every day often feel overwhelming, your group will provide a powerful link between your personal life and the organizations in which you participate. It will enable you to stay grounded and build stronger relationships at work, home, and in your community.
If your group sustains itself for a number of years, you will find that its members become some of your best friends. Together you have the benefit of being part of each other's lives and sharing your life histories. You will be bonded by the joys and sorrows you have shared together. Having this history enables you to connect on a much deeper level.
The time is ripe for a rapid expansion of True North Groups to fill the void so many people feel as a result of not having opportunities to share themselves, their lives, and their stories in intimate, confidential settings. By providing a supportive place for deep discussions about life's most challenging questions, True North Groups enable us to become fully human and fully alive, awakening to the enormous possibilities within each of us to make a difference in the world through our leadership.
More broadly, the spread of True North Groups can become a small but important step toward healing modern society, with its multiplicity of ills. We believe the collective power of small groups can contribute to the creation of a healthy fabric for people to live lives that enable them to realize their dreams, find purpose and meaning in their lives, and build healthy communities.
Bill George is a professor of management practice at Harvard Business School and former chairman and CEO of Medtronic Inc. (www.billgeorge.org). Doug Baker has served as a corporate executive, consultant, executive coach, and university teacher.
Activism and the concept of counterintuitiveness
From Governance, Risk Management, and Compliance by Richard M. Steinberg. Copyright ©2011 by Steinberg Governance Advisors Inc. Published by John Wiley & Sons Inc. (www.wiley.com/business).
There's something extraordinarily democratic about the idea of those who own a company being able to effect important decisions, and gains have already been made. The ability for shareholders to cast an advisory vote on executive pay, including golden parachutes and the like, is now law. Numerous disclosures of such matters as board composition, structure, and operation also are required.
Gains by shareholder activists can become intoxicating. The more they succeed in gaining power and basking in the limelight, the more active they become. I do believe, however, that reality will take hold before we self-destruct. While it's counterintuitive, more power in the hands of shareholders does not translate into better performance and greater share value. For the golfer out there, you understand the concept of counterintuitiveness: swinging down to hit the ball up, hitting out to hit the ball straight, and swinging easy to hit it far. So while shareholder rights will strengthen, standards setters, regulators, the judiciary, and other influences of the process will ultimately maintain a balance and allow boards comprised of the right individuals with the right talents to make the best decisions for the company and its shareholders.
Richard M. Steinberg is founder and CEO of Steinberg Governance Advisors Inc. He formerly led the corporate governance advisory practice of PwC.
Governance in all its ‘simplicity'
From Corporate Governance Failures, edited by James P. Hawley, Shyam J. Kamath, and Andrew T. Williams. Copyright ©2011 by University of Pennsylvania Press. Published by University of Pennsylvania Press (www.upenn.edu/pennpress).
The simplicity of the term “corporate governance” belies the complexity and nuance of the rules and practices affecting the relationships among the players involved in the ownership and operation of corporations. The term can refer to the command and control of the internal corporate decision-making and reporting processes, including internal financial controls, directed by executives. It can refer to the oversight and direction supplied to executives by the board of directors, and to the compensation practices of the board.
It can refer to the gatekeeper functions supplied by outside professionals, such as attorneys and accountants who assist the board and management in complying with law and with accurately reporting the corporation's financial position, both for the benefit of investors and for the corporation's own understanding of its operations. It can refer to the process by which shareholders elect directors, as well as to the process by which shareholders can be involved in nomination of director candidates. It can refer to rules respecting how and when information about the corporation is disseminated to shareholders and to the market at large.
All of these functions, company by company, manager by manager, and investor by investor, can benefit from careful attention. Without the changing of liability standards, or the policies underlying the business judgment rule, thoughtful and deliberate governance can improve corporate performance.
James P. Hawley, Shyam J. Kamath, and Andrew T. Williams are professors of economics and business at Saint Mary's College of California.
Thomas Jefferson's debt-reduction plan
From Presidential Leadership by Nick Ragone. Copyright ©2011 by the author. Published by Prometheus Books (www.prometheusbooks.com).
Upon becoming President in 1801, Thomas Jefferson was determined to end the government's deficit spending and eliminate the national debt, which had grown to $17 million over the preceding dozen years. Jefferson's old nemesis Hamilton was primarily responsible for the debt, which he considered a “national blessing” because, in his estimation, it strengthened the federal government, nationalized the economy, and spurred the need for government revenues. Jefferson saw it the other way: it dangerously centralized the government power, practically invited intrusive taxes and government corruption, and created an economy that favored manufacturing and industry over farming.
Jefferson's plan to tackle the debt was relatively simple: cut spending by reducing the number of federal jobs (which totaled only 130 when he took office); put the navy in dry dock and dramatically scale back the army; and curtail most internal improvements that could be otherwise managed by the states. Many Federalists, and even some moderate Democrat-Republicans, believed that Jefferson's single-mindedness about eliminating the debt was excessively severe, bordering on draconian. They were especially concerned about his dismantling of the navy. This, after all, was a function that the states could not pick up. Doing away with it, they argued with Jefferson, would stunt America's development and put it at the mercy of the European powers. It would turn out to be one of the worst decisions of his presidency.
Nick Ragone is a partner with Ketchum Inc., the global public relations firm, and director of the firm's Washington, D.C., office. He has written several books on presidential history and politics (www.nickragone.com).
Time for a reset
From Management Reset by Edward E. Lawler III and Christopher G. Worley. Copyright ©2011 by John Wiley & Sons Inc. Published by Jossey-Bass, a Wiley imprint (www.josseybass.com).
The need for a management reset is compelling. Technology, globalization, and workforce changes are pushing for faster, more agile organizations. At the same time, social and ecological forces that once got honorable mention in business strategy discussions are today full-fledged stakeholders demanding attention. Both trends are making profits harder to come by and together are demanding that organizations change the way they think about everything from goals and growth to cultural impact and carbon footprints.
The nature and strength of these changes led us to argue for a management reset. The bold focus of this book is on describing a new approach to management. Sustainable management is designed around agility and multiple stakeholders in an attempt to generate economic performance, positive social benefits, and ecological health. It calls for new ways of creating value, organizing, treating people, and leading them.
Edward E. Lawler III is the director of the Center for Effective Organizations at the University of Southern California and Christopher G. Worley is a senior research scientist at the Center.