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Articles in Brief
A quick synopsis of what other publications are
saying about topics related to leadership, employee
involvement, quality, and organizational
performance
Business2.0
www.business2.com
April 2003
Why it’s Time to Take a Risk
Resources are cheap. The competition is paralyzed.
The last thing you should do right now is play it
safe.
Like a crash diet, retrenchment may help you look
less like an inflated marshmallow, but the
improvement will be temporary unless you commit
yourself to better nutrition and a sustained exercise
regime. Denominator management—whacking away at
head count, paring down inventory, and slashing
capital budgets to buttress your financial
ratios—can take you only so far.
Retrenchment doesn’t transform a
company’s cost structure fundamentally; it
simply establishes a new, lower equilibrium between
revenues and expenses. It doesn’t create
competitive advantage—not unless you’re
taking costs out a lot faster than your competitors
are and doing so in ways that don’t imperil
long-term success. In other words, retrenchment can
buy you time, but it can’t buy you a
future.
At some point, in fact, it becomes retreat.
Studies suggest that this point often comes sooner
than most business people expect. A Mercer Management
study of 116 companies that aggressively cut costs in
the 1990-91 recession, for instance, determined that
only 29% of them grew profitably in the latter half
of the decade. A more recent study by Strategos, the
Chicago-based consultancy chaired by [the
article’s author] Gary Hamel, demonstrated the
limits to a single-minded focus on cost cutting. It
showed that while a company can grow earnings faster
than revenues for a few years—a sure sign of
denominator management—one that grows earnings
more than five times faster than revenues for more
than three years in succession is almost certain to
see a subsequent collapse in growth. The point is
simple: Retrenchment makes you smaller, not
better.
Fast Company
www.fastcompany.com
April 2003
Rules of Business Ethics
Striking a balance “between integrity and
sensibility,” the U.S. Department of Commerce
issued a set of business-ethics guidelines that it
hopes will restore confidence in the U.S. economy by
making it easier for the public to understand what
constitutes unethical behavior and for corporations
to fulfill their moral and legal obligations. An
excerpt of the regulations, including codified
exceptions, will be available online at
www.commerce.gov .
Fortune Magazine
www.fortune.com
March 20, 2003
Swedish Board Games: Feminist Quotas in
Swedish Boardrooms
“Women Storm
Boardrooms,” screeched Sweden’s largest
tabloid, Aftonbladet, on March 6. No, feminist
Vikings are not crashing executive suites. Things are
more serious than that—the government is
threatening to do it for them.
Late last year, deputy prime minister and minister
for equality, Margareta Winberg, said that if women
did not constitute 25% of the boards of public
companies by the end of 2004—they currently
make up 6%, half the rate in the U.S.—she would
seek to impose quotas. “I don’t much like
quotas,” Winberg told Fortune, “but if
that’s the only thing that will make people
act, then so be it.”
The powers-that-be are not amused. “The
business sector doesn’t at all like the idea
of
quotas,” says Goeran Tunhammar, CEO of the
Confederation of Swedish Enterprise. Tunhammar agrees
that boards should have more women but says companies
should be allowed to set the pace.
HR Magazine
www.shrm.org
March
2003
Putting HR in Rotation
Demand
a seat at the table. Become a strategic business
partner. Be proactive. It’s all good advice.
But like a mother’s reminders to take your
vitamins or wear galoshes, these mantras seem to have
turned off—rather than motivated—many HR
professionals. It’s easy to see why: It’s
one thing to talk about becoming a business partner;
doing it is a whole other matter.
Experts say the surest way for HR professionals to
become strategic business partners is to learn more
about the business they serve. And actually
“doing the business” is often the best
way to learn it.
A prime way to do the business is to participate
in a program that offers rotating assignments through
non-HR functions. Simply put, there is no substitute
for experiential learning.
Ironically, that’s a mantra HR professionals
seem to have bought into only for co-workers in other
disciplines. For decades, HR development executives
have coordinated rotation programs that have allowed
their counterparts in finance, marketing, and
operations to gain broad business experience and move
up the corporate ladder. But, unlike their
colleagues, the vast majority of HR executives who
function as business partners have not participated
in rotation programs.
Toning Up Communications
Writing skills are becoming increasingly important in
the workplace. More employees are required to write
effectively, even if their jobs never included
writing previously.
One reason for this change is that nearly every
worker is connected via e-mail—to each other
and to customers. For instance, customer service
agents who used to spend 95% of their time on the
telephone are increasingly required to answer
customer inquiries via e-mail.
Also, downsizing has eliminated the administrative
assistants who used to edit, correct, and type
business correspondence. Now, all but the upper
echelon of executives write and send their own
letters and e-mail messages. No matter whether the
writer is a CEO, a sales manager, or a customer
service representative, poor communication can lead
to loss of business.
“It is embarrassing when executives send out
[correspondence] with misspellings and bad
writing,” says Yvonne Alexander, owner of
Alexander Communications, a Sebastopol, CA, company
that offers writing seminars. “As managers move
up the ladder, their writing gets more complicated
and the quality deteriorates. They write in this
oblique, dense style. You can’t make sense of
it.”
“If you send out a sales letter that is
filled with errors, you’re losing credibility.
You send the image that your company is
careless,” says Dawn Josephson, president of
Cameo Publications, an editorial and publishing
services firm based in Hilton Head, SC.
Credibility is not the only issue. E-mail
messages, sales letters, and policy manuals are meant
to communicate. Bad writing can muddle the message.
Alexander recalls an HMO whose policy stated that
customers who receive money from a third party for
their injuries would reimburse the company. A woman
insured by the HMO broke her leg in an auto accident,
and then collected $200 from the other driver. Her
HMO, which had paid her medical bill, took the woman
to court to collect the $200 she had received;
however, the judge ruled against the HMO “based
on the fact that the policy was written so badly that
no one could understand it,” Alexander
says.
Inc. Magazine
www.inc.com
March
2003
The Power of Listening
In the
beginning was the dream, as is the case with most
entrepreneurial ventures, only at that stage it
wasn’t too grandiose. “Seven years and
out,” says Paul Centenari. Buy the company,
fatten it up, and sell it.
Not long after came the nightmare. What had been a
tidy, profitable little business when Centenari and
his brother Peter bought it was suddenly a charter
member of its bank’s workout group, one step
this side of bankruptcy. The Centenaris were on the
hook personally, big time. “I’d come home
and look at my house and wonder, will they take my
house?” says Paul. “I’d look at my
wife and wonder, will they take my wife?” He
smiles wanly at the feeble joke. It wasn’t a
funny time.
But when they woke up from the nightmare, the
company finally back on its financial feet, the
Centenaris had a revelation, which is to say that
they began to dream a different kind of dream
altogether. Wait a minute, they told each other. We
can do this. We can start with a tiny company in a
hardscrabble nickel-and-dime industry and build it
into a billion-dollar business. We’ll expand
our existing plants. We’ll scarf up
competitors. We’ll learn to do things that
nobody else can do.
If this were a movie trailer, the music would be
swelling. Oh, and one more thing. We’ll show
the world there’s a different way of running a
company—a better way. We’ll open the
books. We’ll share ownership and help everybody
get rich. Hell, we’ll build a democracy!
We’ll have our people vote on how to spend the
company’s money.
T+D Magazine
www.astd.org
March
2003
A Boot to the System
When
General Physics needed to shake up its system, it
called on a West Point grad to help create a boot
camp-style leadership program for middle- and
upper-level management. That unconventional approach
was taken because executives knew that a certain
level of shock was needed to get company leaders to
wake up and pay attention.
For seven days, the “boots”
(participants) completed a rigorous, more than
17-hour schedule of physical and mental activities,
including many teamwork exercises. As the long days
began to take their toll, a motivational speaker was
brought in. Problems with the system were also worked
out: senior officers also needed training, so they
joined the boots mid-week. By the end of the course,
participants were proud of their accomplishment and
were committed to change.
Now called Leadership Tools and Techniques, boot
camp continues to be a success for GP and is now a
requirement for anyone seeking a promotion to
supervisor.
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