ASQ - Team and Workplace Excellence Forum

Online Edition — January 2003

In this Issue
“Remember the Titans”—The Rest of the Story
Looking Toward the Future

Ask the PowerPhrase® Expert

Life Lessons

Features

AQP Connections
What’s Up?
The Help Desk
Out of Context
Articles in Brief
News Bites
Book Nook
January 2003 News for a Change—Home Page

NFC Index

AQP Home

Articles in Brief
A quick synopsis of what other publications are saying about topics related to leadership, employee involvement, quality, and organizational performance

Across the Board
www.conference-board.org
November/December 2002

How Much Should a CEO Make?
Dissatisfaction with excessive CEO pay has grown steadily in recent years, and the calls for pay cuts in the corner offices have never been louder than in the wake of recent corporate scandals. Although everyone from the man on the street to the man in the Oval Office has an opinion on how much is too much, no one seems to be able to say how much is just right. So The Conference Board went to the experts: CEOs and former CEOs, compensation consultants, attorneys, economists, and frequent commentators on the issue, as well as a few unexpected sources, such as the leaders of activist groups and researchers for labor organizations.

The Conference Board knew, however, that simply asking how much CEOs should make would not provide a simple answer like, $50 million, and leave it at that. In fact, The Conference Board was fairly sure that no one would be willing to be pinned down to any specific number at all. So a different approach was taken. Rather than asking how much CEOs should be paid, the participants were asked how they should be paid. Questions included: “What are the factors to look at when deciding what figure to put on a CEO’s paycheck? Who should have input in the decision? What’s the best way to handle stock options? Has CEO compensation really gotten out of control?”

Of course, the point is that CEO compensation should be based on more than just financial results. Trying to steer a company based solely on financial results is like trying to steer a car looking out the rear window. Financial results are a lagging indicator of the health of the firm, but CEO compensation should be based on leading indicators, such as customer satisfaction and employee-values survey results (which assess the extent to which leaders are behaving in accordance with the organization’s espoused values).

A well-designed CEO-compensation plan has four elements to it. One is base salary; another is a short-term bonus that is focused on annual results related to customer satisfaction and the employee-values survey, as well as financial performance. Then there should be a longer-term cash bonus, based on the same results during a three- to five-year period.

Finally, stock options are an appropriate part of executive compensation—when held to a reasonable level, but they ought to reflect true economic value creation over time. One way to do that is to avoid vesting stock options until at least five years pass. The message would be clear: “If you didn’t create any value over a five- to 10-year period, then shame on you. You don’t deserve anything anyway!”

Business 2.0
www.business2.com
December 2002

The Face of Your Business: If you want to manage customer relationships, invest in your people, not in software.
Does anyone find it odd that customer service is deteriorating even as companies are investing heavily in customer-relationship management (CRM) software, the technology that tracks customer activity and tailors marketing efforts accordingly? AMR Research reports that some 34% of technology managers plan to invest in CRM software this year. ARC Advisory Group estimates companies will spend nearly $38 billion on the stuff between 2001 and 2005.

Maybe companies are spending on the wrong thing. Before you can manage a relationship, you first need to build it. Relationships are built less on fancy data mining than by what happens to customers when they actually make contact with your organization.

Fast Company
www.fastcompany.com
December 2002

Innovation Now!
Conventional wisdom says to get back to basics. Conventional wisdom says to cut costs. Conventional wisdom is doomed. The winners are the innovators who are making bold thinking an everyday part of doing business.

How to Make Love in the Office
The holiday season brings office parties and spiked punch bowls and a little carrying on and…Bill Clinton and Monica Lewinsky, Jack Welch and Suzy Wetlaufer. Before you know it, there you are: the dreaded—and yet all too frequently visited—land of the office romance, the territory that strikes fear in the hearts of executives. Go there and you risk your reputation, your job, and your career. All the red lights are flashing: Warning!

But is this place really so dangerous? Southwest Airlines thinks it’s not. The airline has about 1,000 married couples on its rolls and gives an annual “Love Award” recognizing the contribution that one special couple makes to the company. Even the erudite offices of National Public Radio (NPR) are a love nest. Over the years, NPR has produced 60 marriages between staffers.

If you find yourself headed down the love path—or you’re supervising others who might be so inclined—there are new rules for combining work and love.

Fortune Magazine
www.fortune.com
November 11, 2002

Don’t Picture the Audience Naked
Don’t breathe deeply. Don’t be a comedian. And don’t try to picture your audience in the buff. That’s what public-speaking coach, author, and four-time Emmy winner Steve Adubato tells clients, ranging from Merrill Lynch executives to U.N. diplomats who are increasingly called on to speak in high-pressure situations. With a rash of poor communicators facing angry mobs (paging Harvey Pitt!) and the rest of us perennially stage-frightened, Fortune caught up with Adubato for a public-speaking refresher and to talk about fainting, data dumps, and board boredom.

HR Magazine
www.shrm.org
December 2002

Stolen Identity
When employees suffer from identity theft, employers also pay a price—especially if their treatment of employee records was part of the problem. The trouble started when a laboratory employee at Ligand Pharmaceuticals Inc. in San Diego came across a box in a storage closet; inside she found the personnel records of 38 former employees of Glycomed Inc., a company that Ligand had acquired in 1995. Using the information from those files including names, addresses, Social Security numbers, birth dates, and other data, the lab worker and her acquaintances fraudulently rented three apartments, opened 20 cellular telephone accounts, and set up more than 25 credit card accounts, which they used to purchase $100,000 in goods.

The worker was eventually caught, convicted, and sentenced, but not soon enough for 14 of the 38 victims, who sued Ligand for negligence, claiming the crime would never have taken place if the company had taken better care of its personnel records.

Inc. Magazine
www.inc.com
December 2002

Profile: Find Trail. Hike. Repeat
Another day, another trailhead. As he has done many times in recent years, Eric Kampmann shoulders a backpack and heads out on the Appalachian Trail. The 59-year-old co-founder and president of Midpoint Trade Books has hiked every step of this fabled American pathway that crosses New Hampshire (161 miles), Vermont (149 miles), Massachusetts (90 miles), and his home state of Connecticut (52 miles). Today, an overcast Friday in late August, Kampmann is starting out in a new state, New Jersey, home to 73 miles of the famous hiking route. The questions: What’s brought him here again? What does he mean when he says, “backpacking has done more than just improve his health, sense of perspective, and psychic balance? Over and above that, it’s helped him design his business.”

Street Smarts: The Employee Mentality
There’s an important lesson you have to learn when you own and operate your own business: your employees don’t think like you. No matter how closely you work with them, no matter how well you treat them, no matter how hard you try to develop team spirit, your relationship to the business is fundamentally different from theirs and so is the way you approach your work. Employees have one mentality, and owners have another—and that’s all right.

T+D Magazine
www.astd.org
December 2002

The Successful Minority
Do you prefer change or stability? This is a trick question. Accepting even the premise of a choice places you in peril. If your preference is change, then all you’ll know is unrest. If your preference is stability, then you’ll be liked but not respected.

Individuals, groups, and organizations that comprise the “successful minority” recognize that the issue isn’t change or stability, but change and stability. They risk changing things and people to usher in something worth stabilizing. The winner’s choice stipulates getting to the top of a mountain, moving on, and finding and creating new mountains. The “successful minority” takes several actions to achieve change success, including articulating the benefits and risks, modeling best practices, ensuring that the support chain is consistent, and building in early warning systems to monitor progress.

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