These five articles reach beyond short-term business trends to point us in a new direction — one that takes leaders to game-changing practices for managing growth, culture and image.
Sharing value: how to reinvent capitalism, co-authored by the great Michael Porter; HARVARD BUSINESS REVIEW
Worthless Wall Street: by John Cassidy, this is the best explanation yet of Wall Street's culture — read it to avoid the traps; THE NEW YORKER
Personalizing social media: you can influence what is said about you simply by using networks; HARVARD BUSINESS REVIEW
Understanding brand and marketing now: learn how to deploy the benefits of new tools in the context of tried-and-true marketing; BRANDING STRATEGY INSIDER
Communicating about performance in real time: it's now possible to do away with the annual performance review and improve employee relations; MASHABLE [disclaimer: Rypple is a client]
The salaries, compensation packages and parachutes negotiated by today's corporate executive teams — especially in the financial services industry — have been appalling, repugnant, avaricious, arrogant and rapacious for years. Now we know, with terrifying certainty, that they do very little to sustain a company's success or stave off failure.
Here are the image and marketing issues executive teams and boards should consider while we await the terms of the taxpayer bailout of Wall Street.
- Exorbitant packages contribute to an unnecessarily high cash burn rate — whether or not your company is hugely successful, it could be even more successful without the burden of executive over-payment.
- The extra people you could employ and programs you could deploy with that excess cash you get could mean the difference between your products' mediocrity and excellence.
- They reward reputation and networks at the expense of current, ongoing performance, especially when your parachutes remain unaffected by lackluster or disastrous results. Without punishment for abject failure, there's no incentive to succeed.
- They distract stakeholders — regulators, analysts, media, shareholders, customers, employees — from what you really want them to see about your companies' performance and sustainability.
- They are a MAJOR public relations sinkhole. They invite your stakeholders to ignore your finer qualities and talents. They invite your detractors to feast on your carcass.
- The day of exorbitant packages is over, anyway. You will look like a prince or princess if you lead the way and promote responsibility in the crafting of exec comp at your company.
CEOs, if you think executive compensation is appropriate across the board, if you think folks like me are wrong, come forward and tell us why. But if you agree that compensation is out of whack, then show us what you're doing about it.
Either way, you have a huge opportunity to communicate with the marketplace and generate great good will for your companies and your leadership. Talk to us.
This morning, as I work, I listen to the Senate hearings on the bailout, I check Twitter commentary, I look at a few blogs. Here's what I think We the People must consider when we put the parameters around the $700 billion bailout.
- My experience in providing client service to investment banker types — people with investment bank backgrounds — is that they look out for Number One in ways that most of us would never imagine. Investment bankers do not follow rules, whether we're talking business practices or good manners. Investment bankers are animals. As a group, the only thing that keeps them in line is a big stick. Congress MUST put strict parameters around these guys we are putting in charge of the $700 billion. And we MUST go after the executive compensation packages
- How did we respond to the Enron mess? By neutering the accounting profession. That, folks, was a bone that Wall Street and its cronies in Washington threw to the American public. And it was a predictor that this mess would happen to us. The destruction of Arthur Andersen was a major sign that these guys are all about finding a scapegoat to take the hit for their own sloppy, self-serving business practices. Not changing the way they did business — not learning from the Enron debacle — not interested in hearing from those with expertise that they don't have but that is germane to their activities. Now, we are left with no watchdogs, either in the private sector or the public, to tell us when the cronies have concocted a risk-laden, byzantine set of financial instruments. It is unconscionable that not one person in a leadership position in industry, government or academia did not look at this maze and tell us what they're telling us now: that this confluence of financial instruments was not nor ever was sustainable.
- The reason I turned on CNBC in the first place this morning was to wait for a segment on a client that was taped three weeks ago. Instead, my attention, by necessity, had to be diverted to the dirty job of fixing a problem created by an elite few — most of whom have never invented anything or bought and sold anything you could hold in your hands. Elitists who never had a summer job on a farm or in a factory, who, with their fancy pedigrees, dictate to the rest of us what is success. This mess is not only something we must clean up, it is sucking the air out of one of the stars of the American way: real business, based on real relationships and transactions. Let's get the mess cleaned up and let's make sure it doesn't deplete us or distract us professionally or emotionally.
Email, call, SHOUT at your representatives in Washington. Yes, we want transparency. But we want punishment. Consequences for bad actions, whether they were intentional or not. Do we let people off a murder charge just because they didn't intend to do it? No. The deviant brains who mixed this cocktail of financial instruments need to go to Man Jail. Their property confiscated. Their cash appropriated to the bailout. I want heads to roll.