I was an Arnie fan. A soldier in Arnie’s Army and damned proud of it. When I grew up, you affiliated with a particular golfer; Jack Nicklaus if you were textbook methodical (Mack, in my H.S. golf team), Gary Player if you leaned toward the flamboyant; Lee Trevino if you were a hustler; and Arnold Palmer if you swung hard, took risks and left everything on the course when you played. You led. Hard.
I was in the Arnie camp. “You swing out of your shoes,” they often told me. I didn’t care. Hell, even today I have trouble laying up for par 5’s. The rewards, when I actually connected, were worth it. And besides… Arnie did it. I only started golfing because of Arnold Palmer. The King.
My first set of clubs was an old, worn set of Tru-Matics by Arnold Palmer. 1-9 iron (yes, a 1-iron). Three woods (real persimmon—remember, I’m old), and a beat up full-size cart bag that I had to lug around. I started playing golf when I was 12, didn’t ride in a cart until I was 16, so that big, honkin’ bag was a chore.
Humble and plain-spoken, I met him once in 1994 as a guest of a friend at Latrobe, Arnie’s course in Pennsylvania. He was playing in the group ahead of us, but took all the time in the world to speak, shake hands, and cut a joke or two. He seemed a giant, even then.
Yes, Arnie was a helluva golfer. The best ever, as far as I’m concerned. He won the U.S. Amateur, 92 events on multiple tours, and seven major tournaments, including four at the Master’s, two at the British Open (Brits like to call it The Open), and once at the U.S. Open. He won a tournament every year for 17 consecutive years. No question, the man owned the links. But I consider Arnie the best, and a real Leader, because he was so much bigger than just a golfer.
The man (and his wife, Winnie) lent their name and provided funding, leadership and support to the Arnold Palmer Medical Center, the largest facility dedicated to children and women in the United States. The Center is comprised of the Winnie Palmer Hospital for Women & Babies and the Arnold Palmer Hospital for Children.
He provided financial and public support to so many more organizations. The list is long. He put his money, name and time where it needed to be, and simply did what he could. Because it was the right thing. And he did so with humility, dignity, respect and extraordinary generosity.
When recently asked in an interview to advise current golf stars, he said, “Generosity and work. Always be generous and appreciate what you have.” When asked in that same interview to name his proudest moments, he didn’t speak of the tournaments won, or the medals received by Presidents Bush and Obama. He said simply “I think of the charities and the results that I’ve seen, that’s very gratifying.”
He was an icon, a legend, and a Leader. A real one. He was, and will remain, The King.
This month’s Leadership Leader. Arnie, you will be missed.
September 10, 1929 – September 25, 2016
Leadership Milquetoast
What exactly is Eddie Lampert, Chairman and CEO of Sears Holding Corp, trying to do to Sears and Kmart? Did he learn nothing at Yale about Montgomery Wards? He must have missed that case study.
“Insanity: doing the same thing over and over again and expecting different results.” Albert Einstein
In brief, Lampert brought (or bought) Kmart out of bankruptcy in 2003 through his hedge fund, ESL Investments.
Within two years, he bought Sears and combined the two companies to create
Sears Holding Corporation (SHC) and became the company’s first Chairman.
As Chairman and CEO of SHC’s majority stockholder, ESL Investments, Lampert oversaw the closure of thousands of stores and year-after-year stock repurchases to dry up billions of dollars (like $7.5B) in cash… all without making significant capital investments in surviving Sears and Kmart stores (which nobody likes going to anymore). Winner: Lampert as the majority stockholder.
What’s wrong with that, since Lambert, a former Goldman-Sachs whiz kid – which means he knows exactly how to wring every investment dollar out of a company – believes that retail isn’t about selling, it’s about being profitable.
The Sears and Kmart team has seen falling sales revenue every year since 2006, and its stock has lost nearly 90% of its value in the same period (~60% in the past 12 months alone). But that doesn’t mean it wasn’t profitable, right?
Right, because since Lampert took over as CEO in 2013, he’s spun off Land’s End and set up a real estate investment trust to take over SHC’s real properties, offsetting operating losses with proceeds from the spinoffs. Did I mention he’s the Chairman of the REIT, too?
ESL is making money, Seritage (the REIT) is making money (remember, REIT’s pay no corporate taxes), and the shareholders are getting dividends. Looks like Lampert wins all the way around, unless you consider him a failure at leading the 160,000+ demoralized employees anxious about their futures. And unless this precarious house of cards implodes, which seems increasingly likely.
Now Sears is talking about spinning off the Kenmore, Craftsman and Diehard lines… though since we can get all of that stuff on the internet, I’m not sure of the point. His recent purchase of $700M of Sears debt and $300M loan ensures he’ll get paid back before the bankruptcy judge gives the stockholders squat.
Hey Eddie – your company needs a leader, not a liquidator. It’s difficult to see a path forward with $5.5B in debt and operating losses nearing $2B annually. I wasn’t a math major in school, but I do own a calculator.
Weak leadership (or an intentional Gordon Gekko impersonation) may have doomed another company that survived two world wars and the Great Depression. Maybe a better question is: “How long will the Board sit idly by and watch Lampert drain the last bit of money and hope out of the company?”
We’re going to give Fast Eddie — and the Board of SHC — a chance to reverse course as this month’s Leadership Milquetoast, but when the billionaire investment banker pushes the company to bankruptcy, you can count on an ‘I told you so’ with that month’s Laggard award.
Leadership Laggard
Culture starts at the top. So does accountability.
Wells Fargo Chairman and CEO John Stumpf’s protestations that the two million (2,099,713 to be specific) fraudulent bank and credit card accounts created over the last five years were the work of individual rogue employees – some 5,300 of them – are laughable.
And if Stumpf thinks anyone believed his “If I Could Turn Back Time” apology in front of Congress, he’s delusional. It’s exactly the kind of “apology that isn’t” that normally wins a Milquetoast award, but that’s not good enough this month.
After all, the dots aren’t hard to connect: years of lawsuits and investigations point to systematic fraud against Wells Fargo customers, encouraged (and expected) by management at the local and regional levels. Only a fool or the very naïve would believe that senior leadership wasn’t aware.
Stumpf says, “There was no incentive to do bad things.” I’m calling bullshit…
The numbers are staggering. TWO MILLION fraudulent accounts. That means nearly four hundred accounts apiece for the 5,300 rogue employees. Either their management was incompetently unaware of their activities or they were complicit. I believe it closely approaches criminal behavior.
If an employee knowingly breaks the rules, you have a behavior problem. If thousands of employees are knowingly breaking the rules, you have a leadership problem. Imagine that in your company, your division fires three employees for wrong doing every single day for five straight years. Seem excessive? Maybe gets someone’s attention?
At Wells Fargo, the head of community banking should have noticed. Stumpf used to be the Community Banking EVP, so he’s familiar with how that works. That’s why he praised the outgoing EVP for her selfless dedication (she’s the “standard-bearer of our culture”) and sent her into retirement with a $125 million bonus. Added to the other senior leadership bonuses, that ought to just about cover the $185 million settlement with the government.
The “standard-bearer of our culture?” A failed leadership culture, to be sure.
The CEO, COO, CFO and Community Banking EVP have a combined 100 years at Wells Fargo. Maybe it’s time for a little chlorine in that gene pool.
A CEO blaming the employees for his bank’s unethical behavior is an insult to his customers and the institution. And it’s a leadership failure that earned John Stumpf Triangle’s Leadership Laggard for Sep 2016.
That idiom has its origins in the Roman Emperor Caracalla, later known as Marcus Aurelius. He was known as one of the bad-ass Emperors somewhere before 200AD. Legend has it he was killed while relieving himself, hence “with his pants down.” Though it may actually have been a robe. Or chainmail. Whatever he was wearing, he had it down and he was killed. Going forward, warriors took care of their business with sword in hand, so not to be “caught with their pants down.”
So, what does this incredibly interesting trivia lesson mean to you? Funny you should ask…
Simply put, in the people equation, demand has—and will continue to—outpace supply. Our recent 2016 Survey of Senior Leadership (SSL) ranked Talent Acquisition/Talent Management as the #2 Leadership Challenge today. Behind only Revenue/ Earnings Enhancement, the perennial #1 for many years.
I know what you’re thinking… War for Talent?? Seriously? Oil is at or around $50. Global layoffs in oil & gas exceed 350k in the past 18 months. Article after article tells of the woes of recent graduates, unable to find anything but McJobs after incurring a bucket-load of student debt.
I was born at night, you say, but not last night.
Yeah well, listen up—it’s happening. We’ve got something of a perfect storm brewing for talent.
Demographics: Baby boomers continue their exodus. And many are stepping aside from leadership roles even if not leaving the workforce. Millennials aren’t just looking for a job, they are seeking specific roles with specific returns and rewards. Simply “needing to work” isn’t enough to cause action if the position and company aren’t a perceived fit.
Market stabilizations, though welcome, mean that hiring simply must take place. Some layoffs were too deep, others brought to surface shortfalls heretofore unrecognized.
Increased employee turnover is an added dynamic. National turnover rates in the U.S. continue to increase, nearly doubling (yes, you read that right, doubling) in the past four years. In other words, you’ve got to plan for new hires and replacement hires. And remember that about half of all that turnover occurs within the first 12 months of hire. Put that in your pipe and smoke it…
We’ve got to pay attention here, and plan for reality. Here are some simple suggestions:
No, really… plan for hiring well in advance of desperate need. Identify what you truly need, and project out for at least a couple of quarters (a year is better).
Be willing to hire when the right candidate is ready. Not when you’re ready, necessarily, but when the right candidate is ready.
Charge recruiters with keeping an eye out all the time. If they stumble upon someone available today who fits a Q3 need, see #2 above.
Be slower on staff reductions. Give market and company conditions some time to equalize. I know the short-term pressures can be big, but longer-term failures due to talent shortages are bigger.
Leadership matters. People will stay with effective, meaningful leadership. They’ll leave if it doesn’t exist. We know that now, so act accordingly. Employee referrals increase when leadership cares. We know that, too. Plus, engaging leaders drive discretionary effort; new hires and incumbents succeed more often with engaging leaders.
Talent matters—nothing new there. The right talent can be difficult to find even when you receive 400 applications/resumes. Ask anyone responsible for recruiting today—they’ll tell you. Bodies are plentiful, specific talent… not so much.
Sort of like the Twilight Zone episode, Where is Everybody?
During the last several months, as I travel around, I’ve been asking people I come in contact with two questions:
Do you like your job?
Why or why not?
Creates some interesting conversations, I’ll tell you. Almost missed a flight out of Baltimore when my conversation with the Hertz counter rep went into overtime.
I jotted down fairly copious notes for these discussions. And though I realize the lack of statistical “rigor” in my survey methodologies, I think the results were interesting nonetheless.
In about four months, I spoke with 56 people about this. Most readily answered my questions. Some, of course, seemed hesitant to respond candidly to such questions from an unknown traveler (go figure). Most, however, spilled their guts without a drop of hesitation.
16 people said “yes, I like my job.”
11 said “It’s OK,” or “It’s a job,” or something equally noncommittal and nonplussed.
26 replied “no,” or something equally negative. A few expletives were included in several.
(for you math whizzes, this doesn’t total 56; 3 would not answer the question at all)
The #1 reason given for “why?” with those 31 who said, “yes?”
They let me do my job.
Not “the money,” though most in this category did mention the pay was either “good” or that they felt paid “fairly.”
Not “it’s easy,” or “I don’t have to do much work.”
Nope, not those things we frequently imagine are in the minds of employees who seem satisfied, contended, or otherwise happy to work for us.
They let me do my job.
Never forget — the vast majority of successful leadership application is not some fancy buzzword, or the chapter title from some consultant’s new glossy book.
It’s the basics. It’s blocking and tackling.
So, what’s the take-away from this incredibly scientific, statistically strict employee survey?
Hire right. Attitude, integrity, intellect and work ethic… none can be trained, all must be hired.
Set and manage expectations. Keep it simple, folks.
Empower people to do their jobs, and expect that they will.
Since Marillyn Hewson became CEO in 2013, Lockheed Martin’s market cap has more than doubled. I’ll say that again: Hewson has led a doubling of market capitalization for Lockheed Martin in less than three years.
For the mathematically challenged, that means a market cap growth of nearly $40 billion. That’s 40 billion dollars. Paraphrasing a Chairman I used to work for, “A billion here, a billion there… pretty soon you’re talking about real money!”
Lest you think hers was a simple, unchallenging, “just-don’t screw-it-up” sort of effort, realize she took over after the originally anointed heir apparent, Christopher Kubasik, was asked to resign after the board discovered he had a personal relationship with a subordinate.
Oopsie.
(Don’t lose sleep about Kubasik; $3.5M in severance and L-3 Communications saw no problem making him President & COO)
Nope, Marillyn Hewson is the real deal. She dumped commercial services (sucking wind) and bought up profitable competitor Sikorsky for a cool $9 billion.
Last year, she was named 4th in the 50 Most Powerful Women in Business and 20th in the Most Powerful Women in the World. She’s a heavy hitter in her own right, to be sure.
In an interview with CNN, Hewson said that “… while she prefers to be known more for her leadership skills, she does realize it’s important to be a role model for women.” Good approach on both counts.
Finally, and this is my favorite, since it reminds us that really effective leadership, though rare, just ain’t all that difficult… during that same CNN interview, she said that, “…as CEO, she derives a lot of energy from walking the facilities and engaging with employees and their families.” WHAAAT? How can that be?? I thought CEOs were supposed to remain staunchly enshrined in their ivory towers.Apparently, Hewson didn’t get that memo. Adding to that, knowing that 25% of Lockheed Martin’s employees are women, 22% are in leadership roles, and women make up a third of the board of directors, it’s obvious to see how Marillyn Hewson is our Leadership Leader for August.
Leadership Milquetoast
Given Facebook’s Mark Zuckerberg’s highly vocal and visible progressive corporate initiatives, it saddens us to see that, apparently, those progressive initiatives do not include employee diversity.
Zuckerberg, CEO (and world’s 6th richest man), and Maxine Williams, Facebook’s Global Director of Diversity (hired in 2013) have given real diversity lip-service at best, quite reminiscent of the stereotype of energy industry’s good ol’ boy’s club.
Though Facebook has grown the Asian percentage by a couple of points since 2012, both Black/African American and Hispanic/Latino (as EEO categories) remain substantially the same (2% and 4% respectively), although Facebook’s headcount has grown almost 350% during that same time.350%!
Female employment is up a single percentage point during that same time.
In 2014, Maxine Williams wrote “So at Facebook we’re serious about building a workplace that reflects a broad range of experience, thought, geography, age, background, gender, sexual orientation, language, culture and many other characteristics.”
2014: “We have more work to do — a lot more. But the good news is that we’ve begun to make progress.”
2015: “While we have achieved positive movement over the last year, it’s clear to all of us that we still aren’t where we want to be. There’s more work to do.”
2016: “We still have a long way to go, but as we continue to strive for greater change, we are encouraged by positive hiring trends.”
“…we’ve begun to make progress.”
“…we have achieved positive movement…”
“…encouraged by positive trends.”
Blah, blah, blah, yadda, yadda… rhetoric in place of actionable results. This isn’t new, of course.
At this writing, Facebook has 1,472 open positions. If history holds true, less than 450 of those hires will be females of any race, less than 90 will be Black/Hispanic (male or female), and over 575 will be white males. The underrepresentation continues… Williams and Facebook won’t release recent hiring data, meaning it’s likely not in the social media giant’s favor.
Williams, taking a page from the handbook of many a good ol’ boy company, deflected accountability by blaming the public education system and “the talent pipeline,” a euphemism for “We just didn’t have enough to choose from; if we did, we’d hire more females and underrepresented minorities.”
“It has become clear that at the most fundamental level, appropriate representation in technology or any other industry will depend upon more people having the opportunity to gain necessary skills through the public education system.”
–Maxine Williams, facebook’s Global Director of Diversity
Not sure how this is any different than any other company on the planet complaining, whining, moaning about how their inability to hire diversity candidates just “isn’t their fault.” If Facebook can’t do it, maybe it’s simply impossible…? Yeah, no.
A copout. Don’t say “nobody can do it.” Intel can. And did.Facebook has the resources to do better, and can/should be an example of a Leader in diversity hiring and employment. Instead, since they pretty much look just like everyone else, we’ll call it a blown opportunity and award them August’s Leadership Milquetoast.
Leadership Laggard
Volkswagen Leadership, past and present. Again.
I know it seems like we’re piling on, given their two-time placements on our Laggard list (here and here). but recent state lawsuits have brought new revelations to light. For instance, now we have allegations that Volkswagen specifically knew that the company’s “clean diesel” engines could not meet pollution standards in normal driving without compromises to performance or fuel economy.
The suits publicly identified for the first time many of these employees (so much for unnamed “engineers”) and accused them of “unlawful conduct.”
The suits said at least eight employees in VW’s engineering department deleted or removed incriminating data in August 2015 after a senior attorney advised them of an impending order not to destroy documents. Whaaat?? How can that be??
VW ex-CEO Martin Winterkorn and ex-marketing dude Christian Klingler allegedly knew in early 2014 of the illegal devices and “did nothing to prevent both Audi and Volkswagen from repeatedly deceiving regulators.” Son of a gun… whouldathunkit??
Bloomberg reports that emails presented by the New York attorney general at a press conference seem to confirm earlier reports that the board members and senior management already had in-depth knowledge about the company’s emissions cheating practices.
A 2013 email from Frank Tuch, VW’s head of quality management, told Winterkorn, “A thorough explanation… cannot be given to authorities”.
In August 2014, Oliver Schmidt, ex-head of VW’s environmental and engineering office told a US spokesman: “[Audi’s] V6 has exactly the same issue, but… they have not been caught.”
Yes, I can see how “getting caught” would be a bad thing. Maybe, then, you should have considered “not doing it??”
This one is too easy… Volkswagen is again our Leadership Laggard, a threepeat in August.
Training is essential for success—always has been, always will be. But like everything else, not all training is created equally. Nor is there a one-size fits all when it comes to teaching employees. And that’s true for leadership – technical, interpersonal or whatever it may be. But there are tried and true strategies for success that can lead to more effective employees, a happier workforce and a better organization. Here are 3 key strategies for training employees that can make the process more endearing for all those involved. (more…)
The usual place for a CEO who was fired for ethical reasons is in the Leadership Laggard section. We’ve made an exception this month to give a tip of our hat to the Board of Directors at Lending Club Corporation for the firing.
Renaud Laplanche, Lending Club’s founder, is now the former Chairman and CEO after an internal probe into loan sales that violated company business rules revealed Laplanche wasn’t exactly forthcoming about what he knew and when he knew it.
Turns out full disclosure isn’t one of Laplanche’s strong suits, since he also failed to disclose his personal interest in a fund that Lending Club was considering as an investment.
The board quickly showed Laplanche and three senior managers the door for the “unacceptable” behavior, disclosed the wrongdoing, and pledged to investors to strengthen internal controls.
Scott Sunburn, Lending Club’s president and acting CEO summed it up nicely, saying, “Our business depends on trust. The problems identified this quarter run counter to our values and will never be tolerated.”
Even though the bad loan sales represented a tiny fraction of the company’s transactions, by proving himself untrustworthy, Laplanche may have completely ruined a business model that relied on the trust and confidence of his customers.
Unfortunately for Lending Club, the board’s actions may not have been enough. Since the early May disclosure, the Securities and Exchange Commission and the Justice Department have launched their own investigations, and the lawyers jumped on a class action lawsuit like a duck on a June bug. Needless to say, their stock is in the toilet right now.
Lending Club’s board took the correct four steps required after a mistake: they acted quickly, they didn’t cover it up; they owned it; and, they took the necessary steps to make it right. For doing it right, we congratulate them and wish them well as this month’s Leadership Leader.
Leadership Milquetoast
Speaking of the right thing to do when you make a mistake, VA Secretary Robert McDonald joins us again this month — this time as our Leadership Milquetoast — with an all-to-familiar leadership tap dance that we call an “apology that’s not”.
McDonald had the opportunity to correct his gaff comparing waiting for treatment at VA facilities to waiting for a ride at Disneyland… and he blew it. In ‘falling short’ of apologizing, McDonald showed he’s still completely out of touch with those he’s charged to care for.
Instead, he said, “If I was misunderstood, if I said the wrong thing, I’m glad that I have the opportunity to correct it.” Who wrote that lame equivocation, Goofy or Dopey?
We didn’t misunderstand, and he did say the wrong thing. But given the opportunity to correct it, he cavalierly let it pass by.
My guess is that Secretary McDonald hasn’t had a long wait for treatment since he left active duty service in 1980. He certainly never waited in a VA facility (P&G always had good benefits), and I guaran-damn-tee you I never looked forward to what was in store for me after the soul-sucking hours I spent in a waiting room full of vets during every visit to the VA hospital after I left the military.
Not that I was shot in the ass with my experiences in the Disney parks when my kids were little either, but to compare the two is beyond imagination.
Come on, Bob! If you want us to believe that you’re solely focused on better care for veterans, here’s a simple equation: trust = integrity + competence + compassion. So far, your misstatement about your service in special forces, doling out over $140M in bonuses for crappy 2014 performance by VA executives, and making light of our fantasy vacations in VA waiting rooms aren’t giving us warm fuzzies.Your decades of military and corporate success don’t give you leave to rest on your laurels at the VA. We don’t need your kind of Milquetoast leadership in such an important post.
Leadership Laggard
Being fired sucks. Being fired by email… now that sucks so bad it might take anger management classes to get over.
What the hell was Matt Clark, co-founder and CEO of Amazing Academy LLC, thinking when he let Amazing.com notify 24 out of the 46 workers at the company via email that their jobs had been eliminated – effective immediately?
Who does that?
To add insult to injury, Clark was “out of the office” when the email went out, and “unavailable” for the next week, so he never had to see their faces again. Okay, maybe the layoffs were necessary (though keeping the staff chef is a stretch), but short of a singing telegram, I can’t think of a more calloused and unfeeling way to let people know.
On the upside, Clark has plenty of potential for leadership development… he’s obviously starting from scratch.
If we had an a-hole of the month award, we’d give it to you, Matt. Instead you’ll have to settle for being Triangle Performance’s Leadership Laggard of the Month.
