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Articles
02/19/2001
Fortune Magazine Time Inc.
FORTUNE Advisor/On The Job/
Matter Of Degrees
Do MBAs Make Better CEOs?
09/01/2000
LIMRA's MarketFacts 24
Copyright © 2000 Bell & Howell Information and Learning Company. All rights reserved. Copyright Life Insurance Marketing & Research Association Sep/Oct 2000
01/03/1999
The Sunday Telegraph
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Features/Articles
FORTUNE Advisor/On The Job/Matter Of Degrees.
Do MBAs Make Better CEOs? Sorry, Dubya, It Ain't Necessarily So
Henry Mintzberg and Joseph Lampel
02/19/2001
Fortune Magazine Time Inc. 244 (Copyright 2001)
George W. Bush, America's first President with an MBA (Harvard, '75), is settling into the White House. The nation itself thus joins the ranks of some 40% of its 100 largest companies, which are also run by MBAs. You'd think America would be in good hands. But do MBAs make effective CEOs? No one, as far as we could tell, has ever checked. So we began to snoop around. First, we considered the success stories, asking knowledgeable people to name American CEOs who had achieved great things over long careers. The names that came up most often were Bob Galvin of Motorola, Bill Gates of Microsoft, Andy Grove of Intel, and Jack Welch of General Electric. The first two never finished their undergraduate degrees; the last two have Ph.D.s in chemical engineering. Then we looked at the other end of the spectrum, the "failed" CEOs. A 1999 FORTUNE article, "Why CEOs Fail," examined 38 of them and found that they had flopped because of "poor people skills" or "bad execution." Of the 33 U.S. companies on the list, 40% of the CEOs--such as Frank Lorenzo of Continental Airlines (Harvard, '63) and James Robinson of American Express (Harvard, '61))--had MBAs. Quite a few! Then we noticed that both Lorenzo and Robinson appeared in a 1990 book called Inside the Harvard Business School, by HBS insider David Ewing. They were on his list of the school's stars at the time--19 graduates who had "made it to the top." Curious, we examined the subsequent performance of all the alleged stars. Nine, including Lou Gerstner of IBM (Harvard, '65), seem to be doing fine. But ten had run into major problems. A number were forced from their jobs. In some cases, like that of William Agee of Morrison Knudsen (Harvard, '63), their companies declared bankruptcy soon after their departure. We're not arguing that the MBA is a dysfunctional degree that ruins everyone who gets it. But given how much of America's well- being is now in the hands of these degree holders, the MBA deserves the kind of scrutiny that its holders accord everything else. Looking more closely at the CEOs who failed, we noticed that they tended to do so in similar ways: They ran their businesses according to a formula, regardless of the people involved or the dynamics of the industry in question. There's a correlation with the degree here: The MBA tends to be heavy on the "B" and light on the "A," teaching business functions, yet not developing the practice of administering. These programs give students the confidence to make decisions but not the competence to deal with the messy reality in which decisions are executed. Students learn to analyze situations and propose "implementation." Unfortunately you cannot replicate true managing in the classroom. The case study is a case in point: Students with little or no management experience are presented with 20 pages on a company they do not know and told to pronounce on its strategy the next day. The MBA was introduced in 1908 and last seriously revised in the 1950s. It's time for a new strategy. Managing today is better served by programs designed for practicing managers who stay in their jobs as they learn from their own experience. We have found that learning occurs not in some high-pressure boot camp, but in an atmosphere of thoughtful reflection (see impm.org).??As for America's new MBA CEO, he's about to get a big dose of that messy reality. He is known for his people skills. How he handles the execution will be the real test. For details, see www.henrymintzberg.com. Henry Mintzberg is Cleghorn Professor of Management Studies at McGill University and teaches only students who are practicing managers. Joseph Lampel is professor of strategic management at the Nottingham University Business School in Nottingham, England.
Copyright © 2000 Dow Jones & Company, Inc. All Rights Reserved.
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LIMRA's MarketFacts 24
Copyright © 2000 Bell & Howell Information and Learning Company.
All rights reserved. Copyright Life Insurance Marketing & Research Association Sep/Oct 2000
09/01/2000
FORTUNE Advisor/On The Job/Gearing Down How to Cut Perks Without Killing Morale Okay, so the free massages have to go. But there's a fine line between being fiscally prudent and just plain petty. Matthew Boyle 02/19/2001 Fortune Magazine Time Inc. 241+ (Copyright 2001) When Living.com started dying last year, Rath Yin saw the writing on the wall--or in the fridge, to be exact. The kitchen cupboard, once stocked with goodies to fuel Yin and his fellow programmers through 80-hour workweeks, grew barer by the day. The online furniture retailer chopped the free massages, then the weekly happy hour. Management said nothing about the cutbacks. That silence heightened Yin's suspicion that the company was doomed, and hastened his eventual exit.
For Yin and thousands of other employees across the nation, the days of free lunches (and free massages) are coming to an end. Companies grappling with the economic slowdown realize they have to trim the fat to stay fiscally fit. To avoid laying off staff, they routinely target employee perks--free coffee, snacks, nights out on the town--where the return on investment is perceived as minimal.
But here's the problem: Once given, perks are extraordinarily hard to take away without sapping morale. And the way companies go about slashing the extras--often arbitrarily and by fiat, with little or no chance for employee feedback--can leave a residue of rancor that outweighs the dollars saved. "When all of a sudden [perks] start disappearing, and there's no discussion or context to put it in, it can create an environment of insecurity and distrust," says Linda Amuso, co-founder and principal at human resources consulting firm iQuantic.
Just ask Tom, an analyst at Sprint PCS in Kansas City, who'd rather we not use his last name. At a weekly meeting in December, Tom was told that the company would no longer provide coffee cups, paper plates, or utensils for employees. "They spun it as being environmentally conscious, but we knew it was just a code for cutting expenses," he says. What bothered Tom wasn't so much the lost perks as the way the company handled the situation. "They're not even up- front about it," he says. Sprint PCS spokesman Dan Wilinsky says kitchen cutbacks are not a companywide policy. "It's not a corporate directive; it might be a local directive."
It's understandable why companies are cutting perks: They're expensive and sometimes downright frivolous. One year of concierge service--which helps employees with such chores as planning a vacation, buying theater tickets, or waiting at home for the cable guy--costs a large company $100,000, according to Dave Lima, CEO of Best Upon Request, a concierge outfit that counts Accenture and S.C. Johnson & Son among its clients. As of this month, employees at Excite@Home have to pay a quarter a can for soda that used to be free. Big deal, you say. Well, multiply that quarter by the 660,000 cans consumed in the course of a year, and voila--you have $165,000. (For a company that lost $2 billion in the first nine months of 2000, every $165,000 counts.) Insurance giant Aetna is saving $400,000 by making employees at its Bluebell, Pa., office buy their own coffee and tea (employees at other Aetna locations already foot the bill). That might be seen as petty by employees of the profitable $26- billion-a-year insurance giant, especially since CEO John Rowe's 2001 bonus will come to more than twice that amount. On the other hand, the $4.5 million that data-mining company MicroStrategy will save by canceling its annual Caribbean cruise will no doubt help stem the tide of red ink there.
For companies considering slashing the extras, it's not so much what they cut, but how they cut. "There are companies that will manage to turn the loss of free soda into Bastille Day because their communications skills are so poor," says Aaron Goldberg, a vice president at Ziff Davis Media. To keep the rank and file from erecting barricades and singing "La Marseillaise," make employees allies in your cost-cutting crusade. "The element of choice almost always results in a better outcome," says Dale Klamfoth, regional vice president at Drake Beam Morin. Ask your staff: Will your work suffer if you don't get a back rub? Which do you prefer: the dog- sitting service or the free Snapple? "If you cut perks in a way that involves people, then you're safe--you could even look generous," says Peter Bregman, head of change-management firm Bregman Partners in New York City.
Companies mulling cuts should also be ready to open their books. Show employees how much could be saved by scaling back the Christmas party. "There's a lot to be said for saying what the numbers add up to," says Goldberg. Very few companies practice such transparency, at least with rank-and-file employees. "An understanding of the business context is the missing gap," says Amuso. Some businesses are trying to close that gap: Glen Mathison, a spokesman for Charles Schwab-- which is cutting back heavily on catered staff lunches, dining out, and entertainment--says Schwab "goes out of its way to explain to new employees the short-term nature of these [cuts]."
Another way to soften the blow is to scale back perks without eliminating them entirely. Best Upon Request's Lima has one client who, rather than cancel the concierge service, has just reduced it a bit. Companies can also ask employees to share the cost of certain perks, like massages. The key thing to remember, says Watson Wyatt vice president Kevin Meehan, is "to use a stiletto rather than a machete."
If your business is sound and looks as if it will remain so, your valued employees won't sweat the small stuff. "Just because some things have been taken away doesn't mean the end is near," says Derrek Milan, CEO of recruitment firm Monday Technology Solutions in San Francisco. "It means the company is being more fiscally responsible." That may protect the most important "perk" of all: the paycheck.
Copyright © 2000 Dow Jones & Company, Inc. All Rights Reserved.
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01/03/1999
The Sunday Telegraph 06
Copyright (C) 1999 The Sunday Telegraph; Source: World Reporter (TM)
FORTUNE's BEST BUSINESS BOOKSYou Can't Shoot Workers, Can You? 'Winning the Talent Wars' by Bruce Tulgan Anne Fisher Mon Feb 19 00:00:00 EST 2001
Not long ago, Bruce Tulgan, author of Winning the Talent Wars (W.W. Norton, $26.95), tried explaining to a group of U.S. Army generals at Fort Leavenworth just how far smart companies are prepared to go to keep talent. Even in a hesitant economy, your best people always have other job offers. Tulgan went on to tell the generals about companies offering part-time work, flextime, and telecommuting, and remarked that some skills-starved companies allow people to leave and return, "or even say, 'Hey, you can go work for our competition. We'll still welcome you back.'" Writes Tulgan: "I guess I wasn't thinking about my audience. Later, one of the generals said to me, 'Son, when our employees go to work for the competition, we shoot 'em.'"??Well, you can't shoot 'em, so what can you do? For starters, you can read this book. Tulgan, who is head of New Haven consulting firm RainmakerThinking (www.rainmakerthinking.com), draws on real-life, day-to-day tactics and techniques in dozens of companies, from Aetna to Xerox, to illustrate what's wrong--and right--with how most of us go about recruiting, training, and keeping the people we need most. The author of a previous book, Managing Generation X, Tulgan sometimes shows impatience with old-style hierarchical types who just can't seem to get with the program. "Every experienced manager and leader in every organization in every industry will tell you: 'In our industry, it's different. It just takes a lot of time to prepare people for a meaningful role in a company like ours.'" To such objections Tulgan says, Oh, yeah? In today's short-attention-span environment, he argues, sticking to a you-can't-contribute-until-you've-paid-your-dues approach just leads to one staffing crisis after another. Tulgan's antidote: People with experience need to spend much more time, energy, and creativity guiding those they manage. Most front-line managers would nod in agreement and do just that--if only they weren't too busy guarding their turf and jousting in meetings. In other words, really great managers stand up for the future of the organization, even if the organization doesn't appreciate it. Tulgan's smart, crisp, light-handed prose makes such radical notions sound downright commonsensical.
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