The Weiman Consulting Letter, November 2006

Wynnewood, PA

HOT TOPIC: Values Gut Check

If you’ve been reading the headlines lately, you know it’s been a fascinating time for leadership in

America:

• The former chairwoman of Hewlett-Packard was booked on felony charges in connection with a case involving spying on Board Members. (Ironically, Hewlett-Packard also had an executive in charge of ethics.)
• Jacob “Kobi” Alexander, the founder and ex-CEO of Comverse Technology, reportedly offered bribes to a company executive to take responsibility for charges against Alexander related to stock-option backdating, including conspiracy, securities fraud, making false filings to US regulators and money laundering. (Under dispute in foreign courts is whether Alexander fled the US or was just taking an extended vacation with millions of dollars.)
• Mark Zuckerberg, a 22-year old Harvard dropout and CEO of Facebook, the popular social networking site, reportedly was unavailable for an 8 a.m. conference call with Microsoft executives because he doesn’t get up that early. An article in The Wall Street Journal explains that he generally works late, and typically doesn’t get into the office until about 10:30 a.m. He can also be unavailable, according to reports, when spending time with his girlfriend.
• Former Florida congressman Mark Foley cluster-bombed his own political party by sending indecent e-mails and instant messages to at least two congressional pages.

Ironically (or maybe not), the feature story of the current issue of The Economistis a 15-page special report entitled The search for talent: Why it’s getting harder to find.

What’s going on? Perhaps nothing more than always did go on, except that in the post-Enron world, there is more scrutiny and accompanying publicity when leaders misbehave. Another possibility is that despite additional scrutiny and publicity, the fundamentals of excellent leadership are missing in those who get the top and then implode spectacularly.

In the Foreword to their classic book Leaders (Harper Business, 1997), Warren Bennis and Burt Nanus wrote the following:

Leadership is about character. Character is a continuously evolving thing. The process of becoming a leader is much the same as becoming an integrated human being.

When you look at the typical criteria that most organizations use to evaluate their executives, there are usually seven: technical competence, people skills, conceptual skills, track record, taste, judgment and character. Of these, the last two are the most difficult to identify, measure or develop.

Of course, they’re correct about judgment and character being the most difficult to identify, measure or develop. But because they are so critical to long term success in leadership, we have to do the best we can to assess these areas before hiring people into leadership positions in our own firms.

Here are a few things to consider when hiring, developing or promoting people into leadership positions in your firm:

• Make it a priority to assess judgment and character. Although it can be difficult if not impossible to predict someone’s future behavior, this doesn’t mean you shouldn’t try to assess these areas. Interviews (with job-relevant questions), reference checks and past work behavior can tell you quite a bit about someone’s judgment and character. And don’t forget to trust your gut: If something happens in the interview process that gives you a bad feeling inside, follow your instincts and ask follow up questions until you’re satisfied that about those issues.
• Make your values and expectations explicit. Running a company without a core set of values is like driving a car without a steering wheel. Use company retreats to discuss and commit to a set of core values that leaders, managers and line staff can commit to. Once established, make sure that leaders entering the company or being promoted have values that are consistent with the firm’s. A written statement of the ethical principles of your company can make it easier for employees to conform to expectations, and easier for you to respond to unethical behavior in the future.
• Respond to unethical behavior as quickly as possible. In the cases of Enron, HP, the Mark Foley e-mail scandal and so many others, there were obvious signs that leaders were going off track long before the wreck occurred. Consult with your business attorney to develop a plan – in advance – for responding to unethical behavior.

If you’re preparing for year-end retreats over the next few months, consider making values and ethics part of the discussions you have with your leadership teams. If you don’t currently do a year-end retreat or review, consider having an annual meeting among members of your leadership team to discuss this important issue.

And if you’re considering getting Mark Zuckerberg’s advice on how to build your company, just make sure you call after 10:30.

Great Resource: RedRoller Shipping Comparator

The current issue of Inc. Magazinebrought to my attention this great resource: a new website (launched in June) called RedRoller, which “promises relief to small companies reeling from high shipping costs,” according the item.

The site lets users compare shipping costs, schedule deliveries and print labels with FedEx, DHL, the United States Postal Service and other regional shippers. RedRoller founder Bill Van Wyck is quoted in the piece as claiming that mail-heavy businesses can save up to 50% by using the RedRoller site, and says that the ideal customer for the service – which is free – is a Web retailer that spends $1,000 per month on shipping.

I checked it out for a package I sent just yesterday, and found I could have saved money by going with DHL instead of US mail. The service would seem to have the most benefit for small to medium sized firms looking to pare down their shipping costs. If that describes you, check it out!

The Lost (and then found) Plotz Memos:

I recently came into possession of a dusty carton of memos written by CEO Max M. Plotz. If you’ve never heard of him (and I suspect you haven’t) Plotz was a mercurial but compassionate man who ran Consolidated Candies (with plants in Lahaska, PA and the Mayfair section of Philadelphia) from the 1940s through the early 1970s. He was well known for the memos he wrote to his staff. Those memos were often terse, sometimes funny, and always filled with valuable wisdom. I have received permission from the Plotz family to reprint his memos in The Weiman Consulting Letter. I hope you find them as valuable as I did.

CONSOLIDATED CANDIES

To: The Staff
From: Max M. Plotz, CEO
Date: June 10, 1970

Subject: Electric Bill

You may be shocked to learn that, despite the apparent plentiful supply, electricity is not provided for free to Consolidate Candies by the electric company.

As I prefer small bills to large ones, I would appreciate it if you would turn off the lights in your office (and any other place you see them on) when leaving at the end of the day.

I realize this may be quite inconvenient, especially if your hands are full. So be creative! With a little practice you could probably use your elbow to flip the switch while walking by without even stopping! The chin method takes a little more practice, but works equally well.

The better you get at this, the less we’ll spend on electricity. And memos about turning off the lights. As always, you have my thanks.