The Seven Habits of Spectacularly Unsuccessful Executives

By ERIC JACKSON
Sydney Finkelstein,
the Steven Roth Professor of Management at the
Tuck School of Business at Dartmouth College,
published “Why Smart Executives
Fail” 8 years ago.

In it, he shared some of his research on what over 50 former high-flying
companies – like Enron, Tyco, WorldCom, Rubbermaid, and Schwinn – did to become
complete failures.  It turns out that the senior executives at the companies all
had 7 Habits in common.  Finkelstein calls them the Seven Habits of
Spectacularly Unsuccessful Executives.
These traits can be found in the leaders of current
failures like Research In Motion (RIMM), but they should be early-warning signs
(cautionary tales) to currently unbeatable firms like Apple (AAPL), Google
(GOOG), and Amazon.com (AMZN). Here
are the habits, as Finkelstein described in a 2004 article:
Habit # 1:  They see
themselves and their companies as dominating their
environment
This first habit may be the most insidious, since it appears to be highly
desirable.  Shouldn’t a company try to dominate its business environment, shape
thefuture of its markets and set the pace within them?  Yes,but there’s a catch.  Unlike successful leaders, failed leaders who never question their dominance
fail torealize they are at the mercy of changing circumstances.They vastly
overestimate the extent to which they actually control events and vastly
underestimate the role of chance and circumstance in their success.
CEOs who fall prey to this belief suffer from the illusion of personal
pre-eminence: Like certain film directors, they see themselves as the auteurs of their companies.  As far as they’re concerned, everyone else
in the company is there to execute their personal visionfor the company.  Samsung’s CEO Kun-Hee Lee was so successful with electronics that he thought he
could repeat this success with automobiles.  He invested $5 billion in an  already oversaturated auto market.  Why? There was no business case.  Lee simply
loved cars and had dreamed of being in the auto business.
Warning Sign for #1:  A lack of respect
Habit #2:  They identify so
completely with the company that there is no clear boundary between their
personal interests and their corporation’s interests
Like the first habit, this one seems innocuous, perhaps even beneficial.  We
want business leaders to be completely committed to their companies, with their
interests tightly aligned with those of the company.  But digging deeper, you
find that failed executives weren’t identifying too little with the company, but
rather too much.  Instead of treating companies as enterprises that they needed
to nurture, failed leaders treated them as extensions of themselves.  And with
that, a “private empire” mentality took hold.
CEOs who possess this outlook often use their companies to carry out personal
ambitions.  The most slippery slope of all for these executives is their
tendency to use corporate funds for personal reasons.  CEOs who have a long or
impressive track record may come to feel that they’ve made so much money for the
company that the expenditures they make on themselves, even if extravagant, are
trivial by comparison.  This twisted logic seems to have been one of the factors
that shaped the behavior of Dennis Kozlowski of Tyco.  His pride in his company
and his pride in his own extravagance seem to have reinforced each other.  This
is why he could sound so sincere making speeches about ethics while using
corporate funds for personal purposes. Being the CEO of a sizable corporation
today is probably the closest thing to being king of your own country, and
that’s a dangerous title to assume.
Warning Sign for #2: A question of character.

Habit #3:  They think they have all the answers
Here’s the image of executive competence that we’ve been taught to admire for decades: a
dynamic leader making a dozen decisions a minute, dealing with many crises
simultaneously, and taking only seconds to size up situations that have stumped
everyone else for days. The problem with this picture is that it’s a fraud.
Leaders who are invariably crisp and decisive tend to settle issues so quickly
they have no opportunity to grasp the ramifications. Worse, because these
leaders need to feel they have all the answers, they aren’t open to learning new
ones.
CEO Wolfgang Schmitt of Rubbermaid was fond of demonstrating his ability to
sort out difficult issues in a flash. A former colleague remembers that under
Schmitt,” the   joke   went, ‘Wolf  knows everything about everything.’  In one
discussion, where we were talking about a particularly complex acquisition we
made in Europe, Wolf, without hearing different points of view, just said,
‘Well, this is what we are going to do.’”  Leaders who need to have all the
answers shut out other points of view. When your company or organization is run
by someone like this, you’d better hope the answers he comes up with are going
to be the right ones.  At Rubbermaid they weren’t.  The company went from being
Fortune’s most admired company in America in1993 to being acquired by the
conglomerate Newell a few years later.
Warning Sign for #3:  A leader without followers.
Habit #4:  They ruthlessly
eliminate anyone who isn’t completely behind them
CEOs who
think their job is to instill belief in their vision also think that it is their
job to get everyone to buy into it.  Anyone who doesn’t rally to the cause is
undermining the vision.  Hesitant managers have a choice: Get with the plan or
leave.
The problem with this approach is that it’s both unnecessary and destructive.
CEOs don’t need to have everyone unanimously endorse their vision to have it
carried out successfully.  In fact, by eliminating all dissenting and
contrasting viewpoints, destructive CEOs cut themselves off from their best
chance of seeing and correcting problems as they arise.  Sometimes CEOs who seek
to stifle dissent only drive it underground. Once this happens, the entire
organization falters.  At Mattel, Jill Barad removed her senior lieutenants if
she thought they harbored serious reservations about the way that she was
running things.  Schmitt created such a threatening atmosphere at Rubbermaid
that firings were often unnecessary.  When new executives realized that they’d
get no support from the CEO, many of them left almost as fast as they’d come on
board.  Eventually, these CEOs had everyone on their staff completely behind
them. But where they were headed was toward disaster.  And no one was left to
warn them.
Warning Sign for #4:  Executive departures.
Habit #5: They are
consummate spokespersons, obsessed with the company image
You know these CEOs: high-profile executives whoare constantly in the public
eye.  The problem is that amid all the media frenzy and accolades, these
leaders’ management efforts become shallow and ineffective. Instead of actually
accomplishing things, they often settle for the appearance of accomplishing
things.
Behind these media darlings is a simple fact of executive life: CEOs don’t
achieve a high level of media attention without devoting themselves assiduously
to public relations.  When CEOs are obsessed with their image, they have little
time for operational details. Tyco’s Dennis Kozlowski sometimes intervened in
remarkably minor matters, but left most of  the company’s day-to-day operations
unsupervised.
As a final negative twist, when CEOs make the company’s image their top
priority, they run the risk of using financial-reporting practices to promote
that image.  Instead of treating their financial accounts as a control tool,
they treat them as a public-relations tool. The creative accounting that was
apparently practiced by such executives as Enron’s Jeffrey Skilling or
Tyco’sKozlowski is as much or more an attempt to promote the company’s image as
it is to deceive the public: In their eyes, everything that the company does is
public relations.
Warning Sign of #5:  Blatant attention-seeking.
Habit #6: They underestimate
obstacles Part of the allure of being a CEO is the opportunity to espouse a vision.

Yet, when CEOs
become so enamored of their vision, they often overlook or underestimate the
difficulty of actually getting there.  And when it turns out that the obstacles
they casually waved aside are more troublesome than they anticipated, these CEO
shave a habit of plunging full-steam into the abyss.  For example, when Webvan’s
core business was racking up huge losses, CEO George Shaheen was busy expanding
those operations at an awesome rate.
Why don’t CEOs in this situation re-evaluate their course of action, or at
least hold back for a while until it becomes clearer whether their policies will
work?  Some feel an enormous need to be right in every important decision they
make, because if they admit to being fallible, their position as CEO might seem
precarious. Once a CEO admits that he or she made the wrong call, there will
always be people who say the CEO wasn’t up to the job.  These unrealistic
expectations make it exceedingly hard for a CEO to pull back from any chosen
course of action, which not surprisingly causes them to push that much harder.

That’s why leaders at Iridium and Motorola (MMI) kept investing billions of
dollars to launch satellites even after it had become apparent that land-based
cellphones were a better alternative.
Warning Sign of #6:  Excessive hype.
Habit #7: They stubbornly
rely on what worked for them in the past Many CEOs on their way to becoming

spectacularly unsuccessful accelerate
their company’s decline by reverting to what they regard as tried-and-true
methods. In their desire to make the most of what they regard as their core
strengths, they cling to a static business model.They insist on providing a
product to a market that no longer exists, or they fail to consider innovations
in areas other than those that made the company successful in the past. Instead
of considering a range of options that fit new circumstances, they use their own
careers as the only point of reference and do the things that made them
successful in the past.  For example, when Jill Barad was trying to promote
educational software at Mattel,she used the promotional techniques that had been
effective for her when she was promoting Barbie dolls, despite the fact that
software is not distributed or bought the way dolls are.
Frequently, CEOs who fall prey to this habit owe their careers to some
“defining moment,” a critical decision or policy choice that resulted in their
most notable success.  It’s usually the one thing that they’re most known for
and the thing that gets them all of their subsequent jobs.  The problem is that
after people have had the experience of that defining moment, if theybecome the
CEO of a large company, they allow their defining moment to define the company
as well – no matter how unrealistic it has become.
Warning Sign of #7:  Constantly referring to what worked in the
past.

The bottom line: If you exhibit several of these traits, now is the time to
stamp them out from your repertoire.  If your boss or several senior executives
at your company exhibit several of these traits, now is the time to start
looking for a new job.
[Jackson was long AAPL at time of writing]

medical savings account

MSA. An account into which tax-deferred funds are contributed. The money from this account can be used to pay for a variety of the individual's medical expenses, such as aninsurance copay or deductible. This account is often used by people who are self-employed, so the funds are contributed by the individuals, either for their own use or their employees, if they have any.

Succession Planning: What Is It and Why?

Within any organization, people in leadership positions eventually cease to fulfil that role. This can occur for a variety of reasons, such as:

• promotion within the organization
• move to part-time arrangements for better work-life balance
• voluntary departure from the organization to pursue a career elsewhere
• involuntary departure from the organization
• retirement
• serious illness
• death

Organizations that fail to plan for the timely and effective filling of such leadership roles can be caught off guard, with the consequent disruption to normal business activities and the loss of market share. Succession planning is the pre-emptive process of identifying significant leadership positions that could put the organization at risk if left unfulfilled, targeting current employees that could move into such roles and grooming them for succession. Managing leadership succession effectively requires a structured approach that is agreed, understood and followed by everyone involved in the planning process.

The Succession Planning Process

Succession planning requires steps to obtain leadership guidance, collect relevant information, make key decisions, and execute succession and development actions. If undertaking this activity for the first time, you should consider creating a process that is "separate" from other, related activities such as performance management and development planning. Later, after you have executed your process a couple times, you may take down the special elements and start to integrate it with these other activities. The steps below outline such a stand-alone process.

Define purpose, goals, and scope

The top leader of the organization outlines the purpose, goals, and scope of the succession planning activity.

Assemble an oversight committee

The committee’s role is to establish a succession planning process that can fulfil the purpose, goals, and scope outlined by the top leader, and to govern over the process until most of the major questions and issues have been resolved.

Set policy

The oversight committee creates policy around such issues as data security, assessment, succession nominations, communication and development.

Define operational parameters

Again, this is the purview of the oversight committee. Operational parameters include: positions for which successors will be nominated, the scope of the pool of succession nominees and the rating scales used for assessing contribution and potential.

Develop and conduct the assessment

The assessment is essential for comparing succession candidates and slotting them against specific succession positions. The assessment data, generally provided by direct managers of the succession pool, should be reviewed for equity in the ratings and for consensus in the nominations.

Compile and organize the data

The voluminous data that is collected must be compiled into the kind of information needed by leaders to make key decisions. Some of the compilations include: coded organization charts, a “contribution-potential matrix,” reports of any “at risk” positions or individuals, and profiles for all individuals and positions. A spreadsheet or dedicated tool for organizing and displaying such information is recommended.

Conduct organizational reviews

Starting with business unit/functional heads, the succession plan and reports compiled are reviewed and key decisions made. These decisions could range from developmental opportunities for future leaders to actual leadership appointments. The business unit/functional level reviews are followed by reviews at the highest level – with correspondingly higher level decisions.

Implement development plans

While succession decisions may be executed immediately after the reviews, the developmental opportunities must be pursued over the following weeks and months. For future leaders to realize their potential and be better positioned to “step up” when the time comes, these development opportunities must not be allowed to languish once the spotlight is off the succession planning process.

Assess process effectiveness

Like any other business process, your succession planning process will need to be improved, streamlined, integrated with other human resources processes and possibly expanded to accommodate additional participants. While the experience is fresh, take a moment to gather feedback and assess process effectiveness – then set and achieve the most critical improvement objectives.

Leadership Succession

When key leadership roles in your organization become available, how ready are your future leaders to step up to the challenge? World-class organizations know the importance of having top talent lined up and ready to go. The many benefits of effective talent management convey to both the organization and to the individual . . . as do the risks of failing to plan for your organization’s leadership succession.

Preparing your employees for future leadership roles consists of two activities: planning and development. Planning includes the following activities:

• identifying employees who show potential for assuming greater responsibility
• assessing those individuals against some kind of leadership model to understand their strengths and development needs
• developing your leadership model – or set of models – that describe the elements of leadership critical to your organization
• identifying the kinds of roles that will need to be filled
• ensuring a flow of succession opportunities – even if it means removing current leaders that are performing adequately in their role

Developing future leaders goes beyond the classroom. In fact, successful leaders cite other factors besides training when asked to describe their best source of preparation:

• stretch experiences
• a formative mentor
• dealing with hardship and conflict

A progressive view of leadership development will emphasize all of these strategies over a training-heavy approach. However, often an element of “divine intervention” by a development-minded CEO is needed to execute some of the riskier strategies:

• putting an employee in charge of key negotiations with a competitor, vendor, or union
• tapping an employee to turn around a struggling division or function
• tasking an employee to build out a new capability, develop a new product, or enter a new market

The benefits of a thorough approach to succession management accrue to the organization as well as the individual. Organizations achieve the primary goal of having employees ready to step into leadership roles. And they avoid much of the risk linked to bringing too many outsiders into key, high-level positions.

However, not to be undervalued is the benefit felt by employees even before their opportunity emerges. These employees, who are often star performers as middle managers or even individual contributors, can too easily be attracted away by offers from other organizations. “You have to leave to get ahead” is commonly heard in organizations without a capable approach to developing and promoting future leaders. Organizations that prepare their aspiring leaders for higher levels of responsibility replace this talk with higher levels of employee engagement, retention and hope. And they then follow through with those appointments.

Gain the benefits of effective succession planning in your organization by putting in place a robust leadership succession process.

Succession Planning Program Evaluation

Succession planning programs can take many forms. Some rigorously identify specific future career moves for their upwardly mobile leaders, while others may use a more general system of leadership “turns” to be accomplished. Some may clearly publicize their succession planning process and its results, while others perform activities in the background and communicate only to those who “need to know.” The most important thing is for your organization to develop a process that works within your culture and gets the results you need. That said, here are some key questions for when you are evaluating your succession program with an eye to improvements, as well as for when you are just starting to design your own approach.

Results

• Does your succession planning program consistently produce a slate of qualified candidates for any given leadership position that needs to be filled?
• Is your organization able to select internal succession candidates when desirable, rather than have to bring in outsiders with “more experience”?
• Do newly placed (promoted) leaders feel ready and confident about stepping into the new role?
• Do leaders placed (promoted) as a result of your succession planning process typically succeed in their new roles?
• Do your leadership candidates typically stay with the organization longer?
• Is your organization viewed as “the place to go” for MBAs and other aspiring, young professionals?
• Are your future leaders aggressively recruited by other organizations?

Process

• Does top leadership move future leaders around to ensure they experience many parts of the organization?
• Does top leadership aggressively “move out” incumbent leaders who are underperforming in a key role so that ready successors may be “moved up”?
• Do your future leaders “know where they stand”?
• Do your future leaders get the “real world” development they need to prepare them for new leadership roles?
• Does your succession planning process operate “year round” (versus an event that occurs annually)?
• Do current managers willingly “let go” when their staff is selected for new roles or for developmental assignments?
• Is your succession planning process reviewed at least annually and any deficiencies corrected or improvements implemented?
• Is your succession planning process reviewed at least annually and any deficiencies corrected or improvements implemented?

Any evaluation questions that do not receive a resounding “Yes” might provide some fodder for rethinking and enhancing your current approach. However, remember that succession planning can take many forms, and your approach needs only to work for you.

body THE ART OF ASKING QUESTIONS

BY RON ASHKENAS

How well do you ask questions? From my experience, most managers don't think about this issue. After all, you don't usually find "the ability to ask questions" on any list of managerial competencies; nor is it an explicit part of the curriculum of business schools or executive education programs. But asking questions effectively is a major underlying part of a manager's job — which suggests that it might be worth giving this skill a little more focus.

We've all experienced times when we've failed at being good questioners, perhaps without realizing it. For example, not long ago I sat in on a meeting where a project team was reviewing its progress with a senior executive sponsor. During the presentation it was clear from his body language that the executive was uncomfortable with the direction that the team was taking. As a result, without any real questioning of the team, he deferred approval of the next steps until he could have a further discussion with the team leader. When he met with the team leader later, he ripped into him for allowing the team to go off-course. Eventually the team leader was able to explain the thinking behind the plan, convinced the executive that they would indeed achieve their objectives, and was given the go-ahead to proceed. But in the meantime the team had lost its momentum (and a week of productivity), and began to focus more on pleasing the sponsor rather than doing the project in the best way.

This is not an isolated incident. Many managers don't know how to probe the thought process of their subordinates, colleagues, and bosses — and instead make assumptions about the basis of their actions. And when those assumptions are wrong, all sorts of dysfunctional patterns can be created. In a financial services firm, for example, a major product upgrade was delayed by months because the product and IT managers had different assumptions about what was to be delivered by when, and kept blaming each other for delays. When a third party finally helped them to ask the right questions, they were able to come up with a plan that satisfied both, and quickly produced incremental revenue for the product.

There are three areas where improved "questioning" can strengthen managerial effectiveness; and it might be worth considering how you can improve your skills in each one.

First is the ability to ask questions about yourself. All of us fall into unproductive habits, sometimes unconsciously. Good managers therefore are always asking themselves and others about what they could do better or differently. Finding the right time and approach for asking these questions in a way that invites constructive and candid responses is critical.

Second is the ability to ask questions about plans and projects. The examples mentioned above both fall into this category. The challenge with questioning projects is to do so in a way that not only advances the work, but that also builds relationships and helps the people involved to learn and develop. This doesn't mean that your questions can't be tough and direct, but the probing needs to be in the spirit of accelerating progress, illuminating unconscious assumptions and solving problems. This is in contrast to some managers who (perhaps out of their own insecurity) ask review questions either to prove that they are the smartest one in the room, or to make someone squirm. On the other hand, many of the best managers I've seen have an uncanny ability to engage in Socratic dialogue that helps people reach their own conclusions about what can be done to improve a plan or project, which of course leads to much more ownership and learning.

Finally, practice asking questions about the organization. Although usually unspoken, managers have an obligation to always look for ways that the organization as a whole can function more effectively. To do this, they need to ask questions about practices, processes, and structures: Why do we do things this way? Is there a better approach? Asking these questions in a way that does not trigger defensiveness and that is seen as constructive is an important skill for managers.

Most of us never think about how to frame our questions. Giving this process some explicit thought however might not only make you a better manager; it might also help others improve their inquiry skills as well.

Points to ponder over:

Have you seen good and bad examples of how to ask questions?

What's your own self-assessment?

Are you asking yourself the right questions?

About The Author: Ron Ashkenas is a managing partner of Schaffer Consulting and a co-author of The GE Work-Out and The Boundaryless Organization. His latest book is Simply Effective.

~~~Finance Terminology~~~

Options Backdating

Setting the date of an employee stock option to an earlier time than when the option was actually granted. This can allow for a more favorable strike price. Backdating the option is not illegal, but the improper disclosure of the activity to the Securities and Exchange Commission is considered illegal.

Variable Annuity

An insurance contract in which, at the end of the accumulation stage, the insurance company guarantees a minimum payment. The remaining income payments can vary depending on the performance of the managed portfolio.

Pension fund

Pooled-contributions from pension plans set up by employers, unions, or other organizations to provide for the employees' or members' retirement benefits. Pension funds are the largest investment blocks in most countries and dominate the stock markets where they invest. When managed by professional fund managers, they constitute the institutional investor category with insurance companies and investment trusts. Commonly, pension funds are exempt from capital gains tax and the earnings on their investment portfolios are either tax deferred or tax exempt.

Discovery

Pre-trial disclosure process during which several legal devices can be employed by any litigating party to obtain relevant non-privileged information from the opposing or non-opposing party/parties. These devices include depositions, examinations of witnesses, inspection of documents, and interrogatories. If any party is unwilling to cooperate, the court may subpoena the party or the documents, or (after failure to make discovery) dismiss the action or enters a summary judgment.

Cost Estimate

An approximation of the probable cost of a product, program, or project, computed on the basis of available information.</p> <p>Four common types of cost estimates are: (1) Planning estimate: a rough approximation of cost within a reasonable range of values, prepared for information purposes only. Also called ball park estimate. (2) Budget estimate: an approximation based on well-defined (but preliminary) cost data and established ground rules. (3) Firm estimate: a figure based on cost data sound enough for entering into a binding contract. (4) Not-to-exceed /Not-less-than estimate: the maximum or minimum amount required to accomplish a given task, based on a firm cost estimate.

Roy's Safety-First Criterion – SFRatio

An approach to investment decisions that sets a minimum required return for a given level of risk. The Roy's safety-first criterion allows portfolios to be compared based on the probability that their returns will fall below this minimum desired threshold. It is calculated by subtracting the minimum desired return from the expected return of the portfolio and dividing the result by the standard deviation of portfolio returns. The optimal portfolio will be the one that minimizes the probability that the portfolio's return will fall below a threshold level.

The safety-first ratio is calculated as:

= E(r) - Threshold Return
... Standard Deviation

 

Markets in Financial Instruments Directive

MFID. A set of guidelines created by the European Union that created common regulations across the various investment services in each member state. MFID authorizes member states to regulate their own financial firms, requires that firms offer sufficient transaction transparency, and requires that firms offer the best trade execution for clients..

Five Questions That Should Shape Any Change Program

by Scott Keller and Colin Price

Most organizations will shrink or disappear in the long term: only a third of excellent companies remain excellent for decades, and when organizations try to transform themselves, even fewer succeed. But as economic, political, social, and technological change continue to accelerate, and competitive pressure grows more intense, leaders can't afford those odds. The likeliest way to overcome them, we found as we wroteBeyond Performance, is to address the underlying problem: organizations that focus too much on short-term financial performance, at the expense of organizational health, are those that most typically need transformational change; but, unfortunately, the change programs they create are similarly shortsighted.

Change programs that succeed, we've seen, put an equal emphasis on both performance and health in answering five basic questions that should shape any change program. Leaders who do this not only get near-term improvements, but also successfully build their organization's capacity to learn and keep changing over time — keeping them ahead of the pack.

1) Where do we want to go? Sounds simple, but answering this question for both performance and health means setting an aspiration at the intersection of where market opportunities exist, what capabilities your company has, and where you and your employees are passionate about making a difference. Wells Fargo CEO John Stumpf knew the company needed to improve performance, which was becoming increasingly difficult in the lead-up to the financial crisis. Stumpf was also passionate, however, about positioning the company for success in the longer term, by creating a new spirit and way of thinking in the company. So he and his top team set the aspiration of "One Wells Fargo," which included equal focus on performance measures such as earnings growth and cross-sell and on creating a lasting culture of customer-centricity and collaboration.

2) How ready are we to get started? Leaders of most failed change programs we've seen moved straight from aspiration to action. But you can't know what actions to take if you don't have a clear view of the capabilities and mindsets you'll need to develop to make the change stick. When Pierre Beaudoin took over the aerospace division at Bombardier with a mandate for change, he and his team understood that boosting factory performance would require building lean capabilities, something the company sorely lacked despite its engineering experience. Crucially, they also took the time to figure out that ensuring those capabilities were put to full use would mean changing workers' mindsets, from a focus on what engineering could make possible, to valuing individuals, enhancing the role of teamwork, and understanding the needs of customers.

3. What practical steps do we need to take? We've found that leaders need to be as clear about what the company won't do anymore as about what it will do to improve both performance and health. A.G. Lafley, in his famous turnaround of Procter & Gamble, established a portfolio of performance initiatives that, for instance, gave priority to four core businesses. At the same time, he created a "not-to-do" list including projects that were driven by technology rather than customer needs. What's more, he ensured every initiative — whatever its specific focus — included building mindsets and capabilities related to focusing on customers and forging external partnerships as part of its implementation.

4. How do we manage the journey? Implementing a portfolio of performance initiatives can take different forms — everything from running pilots to 'big bang' roll outs. But too often leaders underestimate the amount of energy that is needed to roll out large scale change. To avoid losing momentum, Julio Linares, the CEO of Spain's incumbent telecom operator, Telefónica de España, used three tactics that we've seen succeed at many companies. The first was clear communication so people understood how their project contributed to that year's targets and to the overall transformation program. Second, Linares ensured that a large portion of the company's 20,000 employees felt a meaningful degree of ownership of the changes by involving people at different levels in designing and tweaking them as they went on. Finally, Linares made sure they were making real progress and that the goals were still relevant by holding regular progress evaluations, the results of which were also widely communicated.

5. How do we keep moving forward? Those few leaders who actually reach their performance goal too often see it as the end of the road, and don't plan a transition to a period of continuous improvement. This creates a risk that the company won't be able to sustain the impact it's achieved. Avoiding this trap involves re-purposing some of your transformation infrastructure to have an ongoing role in facilitating knowledge sharing and learning methods, and providing expertise to help the company continue to improve. For these to be embraced in the long term, the right leadership skills and mind-sets must also be in place. After the formal end of a transformation program at ANZ Bank, for example, the company trained more than 6,000 leaders in areas such as self-awareness, resilience, and the ability to energize oneself and others. With these leaders, ANZ has enjoyed an era of continued high performance for more than a decade.
These five questions are straightforward, but too few leaders answer them with equal emphasis on performance and health. The benefits of putting in the time to do so, however, add up to nothing less than far better odds to achieve, sustain, and improve your change aspirations over time.

Companies that have survived 100 years in India

Two World Wars, the Great Depression, India's independence struggle, the Hindu rate of growth, the licence-permit raj, controls on foreign exchange and expansion, and the reforms of the 1990s: a handful of Indian companies have seen it all, and adapted along the way to do well. India has around three dozen century-old companies that are listed and still actively traded. Of these we have selected a dozen that have done especially well at responding to change. "Response to change is the first condition for survival in business," says Dwijendra Tripathi, a former IIM professor who authored The Oxford History of Indian Business. A hundred years is a long period. Dive into the exciting journey of these intrepid survivors.

1788: Breen & Co founded; to become Jessop in 1820

1838: The Times of India launched

1898: Calcutta becomes first city in India to get electricity

1902: Shalimar Paints sets up first paint factory in SE Asia

1902: Tatas open first hotel, Taj Mahal Palace

1910: Advent of electricity helps Britannia biscuits mechanise operations

1911: Shift of India's capital to Delhi announced; ITC gets stalls to advertise at Durbar

1919: Birlas defy Yule and other Scots to get into jute manufacture, WWI fuels boom

1926: Kirloskar makes first diesel engine in India

1929: TVS bags General Motors' dealership

1931: CESC builds tunnel under river Hoogly

1940: For the first time, The Times of India publishes news items

1945: Britannia sales surge, fuelled by contract to supply biscuits to Allied troops

1951: R.D. Birla acquires control of Century Textiles

1953: Bengal Chamber of Commerce completes a 100 years

1958: Godrej & Boyce makes the fi rst Indian refrigerator, in collaboration with GE

1969: Managing Agency system abolished

1975: ITC makes fi rst diversification, into hotels

1988: Jessop celebrates 200 years of existence

1998: Burman family hands over Dabur management to professionals

2007: Tata Steel acquires Corus

Management Tip of The Day by HBR

Getting People to Decide Already:

Indecisiveness plagues many companies. Often, both leaders and employees struggle to make or follow through on decisions. The result? Chronic underperformance. You can conquer this and infuse decisiveness throughout your organization by doing these three things:

• Engage in decisive dialogue. During each interaction with employees, model honest, open, and decisive dialogue. Make sure every meeting ends with a clear understanding of decisions and next steps.
• Turn dialogue into action. Indecision is often the result of confusion. Clarify accountability for reaching and executing decisions.
• Use follow-through and feedback to sustain action. Once you've set an expectation for decisiveness, you need to follow through. Give people honest feedback and discourage indecisive behaviors.
  
  Know Your Unwritten Plan

  When preparing for the future, you need two plans—one you write down, and one that's unwritten, fluid, and evolving. This blueprint exists in your mind as a living, changing understanding of where you're going, why you're going there, and how you're going to get there—all based on your current understanding of how the future will unfold. While your written plan includes specific objectives, action steps, and clear assumptions, the unwritten one consists of gut feel, general direction, and broad priorities. Over time, as you gather information and test ideas, you'll move many of these elements from hazy and unspoken to focused and written.

Commercial Terms

Bifurcation

The splitting of something into two separate pieces. Bifurcation occurs when a company divides into two separate divisions to create two new companies and issue two new shares. Existing shareholders before the split are given shares of the new company though a corporate re-organization.

Byproduct

Output other than the principal product(s) of an industrial process, such as sawdust or woodchips generated in processing lumber. Unlike joint-products, byproducts have low value in comparison with the principal product(s) and may be discarded or sold either in their original state, or after further processing.

Underwater

A call option whose strike price is higher than the market price of the underlying security, or a put option whose strike price is lower than the market price of the underlying security. Thus, there is no incentive to exercise the option today. However, the option still has "time value", value based on the fact that the prices of the underlier can change. This "time value" diminishes as the option approaches maturity.

Dim Sum Bond

A bond denominated in Chinese yuan and issued in Hong Kong. Dim sum bonds are attractive to foreign investors who desire exposure to yuan-denominated assets, but are restricted by China's capital controls from investing in domestic Chinese debt. The issuers of dim sum bonds are largely entities based in China or Hong Kong, and occasionally foreign companies. The term is derived from the Chinese cuisine that involves serving a variety of small delicacies and is especially popular in Hong Kong.

Adjusted Basis Value

Original cost or base price of a fixed asset from which depreciation is deducted, and to which capital expenditure is added. It is a taxpayer's equivalent of book value, and is used to arrive at capital gain or capital loss (resulting from the sale of an asset) for computing applicable tax. Also called adjustable basis value.

The Heart of a Teacher

The child arrives like a mystery box...
with puzzle pieces inside
some of the pieces are broken or missing...
and others just seem to hide

But the HEART of a teacher can sort them out...
and help the child to see
the potential for greatness he has within...
a picture of what he can be

Her goal isn't just to teach knowledge...
by filling the box with more parts
it's putting the pieces together...
and creating a work of art

The process is painfully slow at times...
some need more help than others
each child is a work in progress...
with assorted shapes and colors

First she creates a classroom...
where the child can feel safe in school
where he never feels threatened or afraid to try...
and kindness is always the rule

She knows that a child
can achieve much more
when he feels secure inside
when he's valued and loved...
and believes in himself
...and he has a sense of pride

She models and teaches good character...
and respect for one another
how to focus on strengths...not weaknesses
and how to encourage each other

She gives the child the freedom he needs...
to make choices on his own
so he learns to become more responsible...
and is able to stand alone

He's taught to be strong and think for himself...
as his soul and spirit heal
and the puzzle that's taking shape inside...
has a much more positive feel

The child discovers the joy that comes...
from learning something new...
and his vision grows as he begins
to see all the things that he can do

A picture is formed as more pieces fit...
an image of the child within
with greater strength and confidence...
and a belief that he can win!

All because a hero was there...
in the HEART of a teacher who cared
enabling the child to become much more...
than he ever imagined...or dared

A teacher with a HEART for her children...
knows what teaching is all about
she may not have all the answers...
but on this...she has no doubt

When asked which subjects she loved to teach,
she answered this way and smiled...
"It's not the subjects that matter...
It's all about teaching the CHILD

by Paula Fox