Seems like I’ve been reading a lot over the last few years about activist investors shaking up a company’s leadership – sometimes successfully and sometimes not. Some recent examples include Proctor & Gamble, Nestlé, Samsung (this month’s Leadership Laggard), insurance giant American International Group (AIG), railroad CSX Corp., Buffalo Wild Wings (June’s Leadership Milquetoast) and Avon. Sometimes just the threat of a proxy war can influence leadership to accommodate the investor’s desired change a company’s direction.
Not so with Automatic Data Processing (ADP) CEO, Carlos Rodriguez. You can argue that ADP could use some fresh ideas, but you can’t deny Rodriguez has the cajones to stand up to Bill Ackman, the latest activist challenge to his leadership.
There’s definitely some “he-said, he-said” going on, and I have neither the time nor the inclination to sort out the alternative facts, but Rodriguez was definitely not going to kowtow to an investor who’s stake in ADP is still in stock options.
A couple of things we believe here at Triangle: no one gets their own facts, and you can make numbers support any position you want to take. 58% of statistics are made up, anyway.
Billionaire hedge-fund manager Ackman wanted ADP to reduce “corporate bloat” (who doesn’t, except the bloat), accelerate investment in back-end improvements and product migrations, and increase sales force productivity. I’m fine with those suggestions, although they’re hardly fresh ideas.
Rodriguez countered that Ackman’s analysis was based on cherry-picked data from 2009 and pointed out ADP has out-performed the S&P 500’s returns and eclipsed (like the solar one last week) those of Ackman’s hedge fund over the last half decade. After ADP refused Ackman’s request to extend the deadline for his board member nomination earlier this month, ADP’s board rejected all of Ackman’s nominees (including Ackman himself). The board explained that the nominees would bring no “additive skills or experience to ADP’s board.”
Rodriguez has been with ADP for almost 20 years and has a track record of successful performance and effective leadership. Ackman, who’s recent investments include Chipotle (last month’s Laggard), J.C Penny’s, Target, and Valeant Pharmaceuticals, has been an ADP investor for barely a month. But, I don’t have to pick a side.
Recognizing a CEO who bucked the trend and stood up to a bully investor, we congratulate Carlos Rodriguez for being named Triangle Performance’s August Leadership Leader.
Lots of aspersions have been cast on Damore, many pretending that he said things he clearly and openly dismissed in the memo itself. Damore didn’t say that women are biologically unfit for tech, or that diversity is bad, or that sexism doesn’t exist.
I’ve read Google’s code of conduct; to say this guy violated it is a stretch in reasonableness, and requires interpretations not in evidence.
Pichai said “It is contrary to our basic values and our Code of Conduct, which expects “each Googler to do their utmost to create a workplace culture that is free of harassment, intimidation, bias and unlawful discrimination.”
With this broad interpretation, they can hide behind most anything as a code of conduct violation. The manifesto did not harass, intimidate, show bias (except to use bias as a clear foundation of error), and was not unlawful discrimination. At most, it hurt someone’s feelings. Get over it.
And don’t forget–Google sucks (that’s the technical term) at diversity already. They needed the catalyst for conversation this could have created. Instead, they got bupkus.
If the guy is completely and absolutely wrong, then there is zero reason why Google shouldn’t have positive diversity representation, meaning their significant lack of representation today (or really any meaningful progress at all) must be willful and intentional.
|“Once you eliminate the impossible, whatever remains,
no matter how improbable, must be the truth.”–Arthur Conan Doyle
It’s not a free speech issue per se, since companies aren’t required to allow constitutional free speech (that’s between government and citizens), but it certainly smacks of retaliation for disagreeing with a position. At a bare minimum, it has created a seriously chilling effect on open dialog around diversity and inclusion.
Google–and virtually every other tech company–should get their own house in order before bullying others to suppress opinions. We need diversity—real diversity—in organizations today. I see it as a business necessity for future success. But Pichai, that’s a really dumb way to go about it.
Talk about a missed opportunity. These sorts of conversations–in the open–are what real diversity and inclusion efforts are missing. Google will never have another chance to have an open dialog around these topics (with those who may have different thoughts). No one will ever dissent again publicly. They blew that big time.
That was an unforced error, Sundar Pichai, and it makes you this month’s Leadership Milquetoast.
We wanted to honor Samsung’s board of directors with this month’s Laggard award, but we couldn’t figure out who’s really running the 60+ company conglomerate that makes up the Samsung Group. Certainly not the Chairman, Lee Kun-hee, who hasn’t been seen publicly since suffering a heart attack in 2014.
So, we settled for spotlighting his son, Jae-Yong Lee, aka Jay Y. Lee, and one of two Vice Chairmen of Samsung Electronics who was sentenced last week to five years in prison for bribery, embezzlement and hiding assets overseas.
Remember ousted South Korean president Park Geun-hye? Lee and some of his colleagues have been accused of bribing Park and a “friend” to the tune of $17M in donations to organizations affiliated with the friend and an $800,000 horse for the friend’s daughter to ride. Lee needed government support to merge a few companies in the Samsung Group to strengthen his family’s control. Apparently, the move wasn’t particularly popular with non-family investors.
So, why are we picking on Lee, since he wasn’t alone in the scheme? Because he expected to be treated like the heir apparent when he didn’t know squat about leading or running the business. He was a figurehead who clearly wasn’t busy enough to stay out of trouble. He said it best himself at his trial: “There was no line of approval involving me. I had no knowledge to make decisions, nor the competence.”
Hardly something to brag about from a Vice Chairman of the world’s biggest smartphone and memory chip maker. We’re not worried about Samsung, though; there are some talented guys (excluding Lee) at the top of the electronics giant. Under the leadership of the three co-CEOs who didn’t go to jail, Samsung Electronics posted record net income, released the Galaxy S8, the Note 8, and stock prices reached an all-time high in the six months since Lee was imprisoned.
Think what they might be able to achieve with him behind bars for five years!
Leadership isn’t about titles and control; that’s dictatorship. For his refusal to take responsibility and his clear lack of leadership, we’re pleased to name Jay Y. Lee this month’s coveted Leadership Laggard.