One question kept going through my mind when I heard of President Barack Obama’s decision to abruptly demand the resignation of General Motors CEO Rick Wagoner as part of government efforts to prop up the company.
It’s this: When was the last time a CEO was unceremoniously canned as if he were just another floor worker?
In most cases, CEOs (and just about any resigning senior manager, for that matter) get to walk away on their own terms, in their own way. There is usually a carefully crafted statement, with a little PR spin about “leaving to pursue new challenges” or some other nonsense, and perhaps there is some laudatory BS from the board. And, of course, there’s a big payday in the form of a giant golden parachute.
“The first order of business,” the story reported, was whether or not to oust GM’s Wagoner. “It ‘wasn’t the hardest decision,’ ” according to one unnamed government official who spoke to the Journal.
Detroit News columnist Daniel Howes is even more pointed, asking: “What does it say that on the same day President Obama made nice at the White House with the nation’s leading bank CEOs—none of whom have lost their jobs despite sitting on vastly larger sums of taxpayer dough—the head of the president’s auto task force was urging Wagoner to ‘step aside?’”
These are all good questions, but I keep coming back to the abrupt way Wagoner was given his walking papers. It’s true that if you look at his track record, Wagoner should probably have been bounced long before now. He “has presided over the virtual wipeout of GM shareholders,” according to the Los Angeles Times, with the stock “down 95 percent since June 2000.”
Yes, there was clearly good reason for firing Wagoner, but did we need the very public walking of the plank?
Many people are appalled by how the Obama administration treated the former GM chief, but really, is this any different from the way most rank-and-file workers get shown the door? Yes, Wagoner is leaving with millions, but besides that, there’s not much difference between how he got dumped and how any other working stiff is let go.
I’m not a fan of handling layoffs and firings this way, but I certainly know why the drill goes like this. And that’s the one little hopeful sign I take away from how big-time CEO Rick Wagoner got the ax: Maybe we finally will start to see some leveling of the playing field in how executives and CEOs get treated compared with the rest of the workforce.
In my book, a lot more big-time executives should get terminated publicly when they fail—unceremoniously and with extreme prejudice. And while we’re at it, we should deflate the golden parachute payouts as well.
If that happened a little more often—as perhaps it should have when Phillip Schoonover was running Circuit City into the ground—we not only would get smarter people running organizations, but we’d also have CEOS who would act with lot more sensitivity and compassion when cutbacks are being contemplated for the rest of the workforce.
And although President Obama didn’t do it for Rick Wagoner, perhaps this public episode will make a CEO or two ponder how it might feel for them if the termination shoe were on the other foot.
Funny things happen when times get tough. Issues that seemed critically important a year ago—like the war for talent, employee engagement and the mass retirement of baby boomers , has just fallen off most managers’ radar in the Recession of 2009. You don’t hear many people talking about these topics all that much anymore, because stuff like that kind of goes by the wayside when your business is struggling and your major worry is just survival and keeping people employed.
Instead, we’re getting bombarded by all manner of things having to do with cutting costs and keeping things going until the turnaround comes. For example, how many of you were talking about furloughs at this time last year?
For example, the nation’s largest newspaper company, Gannett (corporate parent of USA Today) did so well in saving $20 million in the first quarter of the year by requiring unpaid employee furloughs, that the company “mandated a second round of unpaid furloughs for most of its 41,500 worldwide employees, this one during the second quarter,” according to the independent Gannett blog.
I worked as a top editor at Gannett newspapers in Montana and Hawaii during the mid-1990s, but these furloughs are way beyond anything I experienced while working for them.
And that’s something to keep in mind: Furloughs are one of those management tricks that seems to be spreading like a Southern California brushfire because it’s a way for an organization to cut costs without actually going through the emotional and financial toll of cutting staff.
It also gets into the notion of shared sacrifice because it spreads the pain across everyone in the workforce. Employees intuitively understand that. They would rather sacrifice a little if it helps one of their colleagues keep a job, but I don’t see a lot of organizations touting that as one of the “benefits” (if that’s the right word) of a furlough.
Yes, “a forced furlough is better than losing a job,” as Frank Ahrens notes at Web site The Big Money, “but it leaves already-at-risk employees feeling even more powerless, buffeted about by bosses and balance sheets.”
The story is well worth a read because it pitches an interesting notion: turning the concept of unpaid furloughs into a series of three-day weekends.
“Why a three-day weekend? Why not? We’re Americans. We love three-day weekends. … Employers could save billions in salary expenses—savings that could prevent layoffs and free up capital for growth or to aid the company’s balance sheet,” the story says. “[And] workers could use their furlough weekends to add a second income. They could turn a hobby into a business or startup and maintain a largely self-perpetuating business, such as property management or any number of online businesses.”
But, there’s another compelling reason for considering the concept of the three-day-weekend furlough: It gives “employees a measure of control over their fate. If an employee is laid off or furloughed, the employer sets the terms. The employee feels powerless. The furlough weekend would go a ways toward changing that.”
This is a “nontangible benefit” for workers, as the story points out, but the potential savings for employers can be substantial—$261 billion in total payroll savings (based on 2008 numbers), if each of the 154 million full-time employees in the U.S. took 10 furlough weekends per year.
That’s the best-case savings, of course, but even a fraction of workers doing this—say, 10 percent—equals about $26 billion in annual payroll savings. That’s a huge chunk of money and would go a long way toward helping to get American businesses back on track again.
I don’t know if this is a viable option, but it is a very intriguing and interesting notion. It is the kind of thinking that elevates the concept of furloughs from just another “me too” business trick to a strategic business practice for bosses and employees to thoughtfully discuss. And given today’s economy, we need to be having a lot more of those discussions than we’ve ever had before.
Not only has the musical entertainment gone from the predictable oldies vibe of the past few years to someone a little more current (Sheryl Crow) but now SHRM has a first-day keynote speaker for the 61st annual conference who actually can speak in a relevant, contemporary way to the challenges facing human resource professionals today. Believe it or not, SHRM has landed former General Electric CEO Jack Welch.
Welch, who has been touted as the “greatest manager of the 20th century,” is pinch-hitting for former NBC News anchor Tom Brokaw, who has been “assigned by NBC to produce a special report from Afghanistan in late June,” according to a e-mail from O’Neill and SHRM. As much as I believe that Brokaw would have had some interesting things to say, his keynote would probably have followed the pattern of those given over the past few years by Queen Noor, Bill Cosby, Lance Armstrong, Colin Powell and Sidney Poitier: interesting in the broad sense, but completely and totally divorced from anything specific that HR faces.
I wrote this back in 2005, but I think it is as true today about Jack Welch as it was back then: “In Jack Welch’s world, HR is not only a key part of the business, but HR people in the organization need to have special qualities to help the managers throughout the organization build leaders and careers.”
Some might disagree with this assessment, because Welch also is known for creating the infamous 20-70-10 employee assessment plan (known by its critics as “rank and yank”), where the top 20 percent of GE’s workforce each year got a big raise, while the bottom 10 percent was shown the door. In fact, Welch was frequently critical of HR, as former GE human resources vice president Bill Conaty points out. But Conaty also details how the former GE chief exec was intimately involved in all manner of HR issues.
No matter how much Welch’s appearance is costing, or what he actually says, I think it is money well spent. And if SHRM is really on the ball, they’ll make sure they tout his HR insight and credentials. In fact, it might actually be something to get people to come out and attend the SHRM conference in New Orleans and perhaps slow the downward slide in attendance.
I could be wrong about this, of course. It’s entirely possible that no single speaker or performer—not Jack Welch, Sheryl Crow or even President Barack Obama—could get people to change their minds about attending SHRM in New Orleans, given the realities of the current economy. What do you think about this? I’d like to know if you are going to attend SHRM in June, or perhaps are now considering doing so, and why. Just post a comment at the end of this blog or e-mail me directly at jhollon@workforce.com. I’ll share any thoughts I get in a future blog post.
There’s one good thing about tough economic times (if you’re willing to say there are any good things): It makes people have a greater appreciation for what they have.
Nowhere is this truer than in the world of employee benefits, because we’re seeing more and more evidence that many perks workers used to take for granted, and perhaps even felt entitled to, are now the very things that they have come to really count on and appreciate as the economy tightens up.
“In this environment, benefits are taking on a heightened importance for most workers. They are more actively involved in managing the benefits provided by their employers, says a new study conducted by MetLife,” and reported in The Arizona Republic.
“MetLife’s 7th Annual Employee Benefits Trends Study said 46 percent of workers surveyed say they are taking a greater interest in understanding the benefits they get through their employer,” the story said. “More than half say they appreciate the benefits more than ever before and 41 percent said their workplace benefits are the foundation of their financial security.”
What’s interesting to me about this MetLife study is that the company felt the need to do the survey twice—first in August and then again in November—because of “the recent volatility in the markets.”
Clearly, MetLife felt that data and opinions collected in the relative good times of last August just wouldn’t be representative of how workers feel today. And although I applaud MetLife’s decision to re-survey in November, I think the findings would probably be even more pronounced had they done taken them again—perhaps in February—after the economy REALLY took a nose dive.
You get a hint of this from the concerns workers expressed in the study.
“A third of workers are worried that their company will cut benefits in the next 12 months,” the Republic story said, “although the study shows only 15 percent of employers said they planned to make such cuts. This also indicates that company officials recognize the importance of benefits to worker morale—39 percent of employers believe that workplace morale is strongly linked to the quality of employee benefits.”
“Focusing on retirement has taken on a bigger role for many individuals. Six out of 10 employees say they have been motivated to look at the level of income they’ll need in retirement. That figure rises to 73 percent for Baby Boomers, participants born between 1946 and 1964 … [and] the biggest concern, cited by 65 percent of workers, is affording health care in retirement. The second biggest worry was a tie between outliving retirement money and having the money to care for a spouse’s long-term needs, both issues cited by six in ten participants,” the story added.
I don’t find it surprising that employees are more appreciative of their benefits, because most workers who still have jobs are concerned with keeping those jobs and all the perks and extras that come with it. That hasn’t really changed, but what has gotten people’s attention is the notion that losing a job doesn’t just mean losing a paycheck.
It also means losing health care, dental and eye coverage, paid vacation and probably access to a retirement plan. If those benefits were taken for granted in the past, they certainly aren’t anymore, at least not in this economy.
“Employees are looking more and more to the workplace for advice, education and guidance so they can make better decisions about their benefit programs … to help them craft a financial safety net for themselves,” said Bill Mullaney, president of MetLife’s institutional business.
Yes, benefits are one part of the safety net that workers depend on, in both good times and bad. It sometimes takes something like a huge economic downturn before people finally really appreciate what they have—and what they should never, ever take for granted again.
If you appreciate really good business books—the ones that are truly insightful, inspirational and demand that you keep them close at hand—a title like The 100 Best Business Books of All Time pretty much hits you over the head and says, “Read me!”But I’ve been disappointed in books like this before, as I noted last summer when I reviewed another title that claimed it had compiled lessons from “the best management books of all time.” That certainly was a wild overstatement, but pretty much par for the course when you get an author (or two) with a limited or narrow view of business and management.
I have a surefire way to spot a book like that, and it’s simple: Look to see how the authors feel about Peter Drucker. If you have studied or understand business much at all, you certainly know that Drucker is considered to be the father of modern business management. Any book that purports to be a collection of the greatest business writing ever needs to have something by Drucker. If it doesn’t mention him at all, it’s a good indication that the authors/editors don’t have the foggiest notion of what constitutes great business thinking. You should close the book as quickly as possible.
That’s why I feel I can recommend, with a few reservations, The 100 Best Business Book of All Time. Authors Jack Covert and Todd Sattersten’s list includes not one, but two Peter Drucker classics: The Effective Executive and The Essential Drucker (but, oddly enough, not his best and most groundbreaking book, The Practice of Management). Any business book compilation that lists two from Drucker has immediate credibility with me.
There are other pluses, and few minuses, that I found in The 100 Best Business Book of All Time. Some of them include:
Plus: Listing a Dr. Seuss book, Oh, the Places You’ll Go, as one of top 100 business books. Some might quibble with this, but that just shows they haven’t actually read much by Dr. Seuss. He’s full of great observations and lessons about both business and life, but I actually think the better Dr. Seuss title in this regard is the underrated but insightful I Had Trouble in Getting to Solla Sollew.
Minus: Throwing in not one, but two Marcus Buckingham titles: First, Break All the Rules and Now, Discover Your Strengths. Given that Buckingham essentially says the same thing Drucker did about playing to strengths and not weaknesses, why would you read Buckingham when you can get it from the master instead?
Plus: Including such modern titles as The Tipping Point by Malcolm Gladwell, Leading Change by John Kotter and The Five Dysfunctions of a Team by Patrick Lencioni along with all-time classics such as Dale Carenegie’s How to Win Friends and Influence People and Winston Churchill’s Never Give In!
Minuses: Missing some great books such as Robert Sutton’s The No Asshole Rule, DisneyWar by James B. Stewart or anything by Harvard professor Michael Porter, who wrote the Five Forces of Strategy and Competitive Advantage (although the authors mentioned some of Porter’s Harvard Business Review articles instead).
Overall, I’d give The 100 Best Business Book of All Time a B-plus. It’s a good book to help you get a sense of what great business thinking is, but it has some flaws. And maybe in the real world, that’s about as good is it gets.
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pretty much hits you over the head and says, “Read me!”But I’ve been disappointed in books like this before, as I noted last summer 
