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Megatrends DuPont bets on DuPont bets on Ellen Kuhlman Q4.2011 the Future Embracing Sustainability The Trouble with The Trouble Where Are All the Italian Women? Selling Stuff on Facebook How Hilti Promotes its Culture germany, master of exports of master germany,

the korn/ferry institute briefings on talent & leadership issue 8 Q4. 2011

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EXPERIENCE No8: The city night. at G

Chief exeCutive offiCer Gary Burnison Publisher Michael Distefano

editor-in-Chief Joel Kurtzman Creative direCtor Joannah Ralston CirCulation direCtor Peter Pearsall marketing oPerations manager Reonna Johnson

board of advisors Sergio Averbach Dennis Carey Robert Hallagan Indranil Roy Michael Bekins Ana Dutra Robert McNabb Jane Stevenson Stephen Bruyant-Langer Joe Griesedieck Byrne Mulrooney Anthony Vardy Cheryl Buxton

Contributing editors Chris Bergonzi Stephanie Mitchell David Berreby Glenn Rifkin Lawrence M. Fisher Adrian Wooldridge Victoria Griffith

Cover photo: The Korn/Ferry International Briefings on Talent and Leadership is published Courtesy of Dupont quarterly by the Korn/Ferry Institute. The Korn/Ferry Institute was founded to serve Cover art: as a premier global voice on a range of talent management and leadership issues. The Matt Woods Institute commissions, originates and publishes groundbreaking research utilizing Korn/ Ferry’s unparalleled expertise in executive recruitment and talent development combined with its preeminent behavioral research library. The Institute is dedicated to improving the state of global human capital for businesses of all sizes around the world.

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Printed in the USA For reprints, contact Reonna Johnson at 310-843-4126. If you’re a regular reader of this magazine, you’re probably interested in how ideas, in one form or another, help shape the world. Right from the beginning, we worked with brilliant partners, like our friends at Microsoft and Google to design some of the world’s most advanced smartphones. Even great minds from outside the tech world have helped make us who we are, everyone from the actor-journalist, Stephen Fry, to Korn/Ferry, the firm behind this magazine. By working together and sharing ideas we were able to accelerate the pace of innovation. This year Fast Company magazine rated us one of the most innovative companies in the world. Whatever we do next, what’s clear is that it’ll be ideas that will lead the way.

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Briefings onTalen T David Strick — “De-risking,” “de-leveraging” and“re-regulating”have I am always amused by corporate speak: “out-of-thespeak: corporate by amused always am I I’ve been I’ve wondering whether I’m still on the front side (a littlelessthanone-thirdofthe world’spopulation) Today, therearealmosttwiceasmanymobilephones market, than it did in the United States. And yet, And States. United the in did it than market, facilities. Onthepositiveside, averagelifeexpec- fortunate generation in history in generation fortunate Inter- the before anything that age of sign a it Is face. world todayhasnoaccesstowrittencommunication which istheworld’slargestandfastest-growingauto watched theroyalweddinginBritain. General MotorssoldmorecarsandtrucksinChina, as there were people in the world 50 years ago. In 2010, net qualifies as “back in the day”? Either the velocity the Either day”? the in “back as qualifies net accelerating. also beeninhighfashionoverthelasttwoyears. Itall \ ‘chānj 1 a:To makedifferent insomeparticular. planet stilldonothaveaccesstotoiletsandsanitation because ofilliteracy.Indiahas545millionworking box,” “forward leaning,”“transformation,” “tipthe of to 73yearsin2009.And,2011, twobillionpeople tancy inChinaincreasedfrom35 yearsbefore1949, the numberofmalnourishedpeopleinworldis cellphones, yethundredsofmillionsmoreonthe change thananyothersimilarstretchincivilization. curred to me that these years may have produced more comes down to change, the pace of whichseemstobe comes downtochange,thepaceof eradicate worldwidepovertyandimprovetheglobal estimated at925million,despitealltheeffortsto standard ofliving.Andaboutoneinfiveadultsthe sword,” and of change has accelerated exponentially or the most the or exponentially accelerated has change of back the to turn the made I’ve if or mountain the of have been enveloped in the very change they started. I recently hit the half-century mark. Ever since, Ever mark. half-century the hit recently I Reminiscing aboutthelastfivedecades,itoc- — the perennial favorite &l eadership — the baby boomers baby the — “change agent.” Burnison_CEO_Letter_6-12jk[1}FE2.doc “outside-in” aswell“inside-out.” Muchistalked years, people remain the instruments of change of instruments the remain people years, money andpower. humanfrail- Orthemostbasicof for goodandbad. for theirchildren.Or, humanity, ontheothersideof football coach at Summerville, S.C., since1952.Dur- football coachatSummerville, S.C., it isnothingmorethanadisguise,covering“barbell” ing thattime,histeamhasamassed 576victoriesand about “outside-in” all of thetechnologicalinnovationsoverlast50 all of for need basic most the is, that culture: even and life.”not standstill.Changeisthelawof andtheworlddo aptly remarked:“Time products. Butlessisspokenabout“inside-out” bigger thanthemselves. privileged andoutcast. between richandpoor, educatedanduneducated, think? Mosttimes, changeisprogress;othertimes, What willpeople Will Ifitin? Will Ibeloved? ties: greed, the oftendestructive,corruptivenatureof the more they stay the same. Some things do tran- do things Some same. the stay they more the human beings to belong, to be a part of something of part a be to belong, to beings human developing people. delectable apple,changehasbeenacon- leader’s responsibilityforengaging, stimulatingand leadership. Changeistablestakesforaleader. Despite scend time, artificial lines on maps called borders, called maps on lines artificial time, scend societies inwhichthereisevengreaterseparation so F.Kennedy John President As stant. of ababy’scry.of Parentstryingtoprovideabetterlife By GaryBurnison A leaderisultimatelyaccountableforgrowth It has been said that the more things change, change, things more the that said been has It These facts of lifetodayhavemuchtodowith factsof These Coach John McKissickhasbeenthehigh school Coach John Some things, however, sound donotchange.The Since Eveallegedlymunchedonthat — top-line sales, innovation,new — — a — the ceo from Q4.2011

5 6 “winningest” coachinthesportatanylevel Q4.2011 McKissick atSummervilleHigh,ayoungmanstoppedbyhis for you.” ing football. What hesaysis,What “Icoachkids.”ing football. wevisited When thebridgebetweendesireandoutcomeisnotsimplyempowering In aneraofdynamicandevencataclysmicchange,letusrememberthat thought howcorporateleaderswouldlovetohearthatsenti- however,terno. McKissick, doesn’tcoach- speakintermsof counting (McKissickhasnoplanstoretire),makinghimthe such greats as Paul “Bear” Bryant, Vince Lombardi and Joe Pa- Vince LombardiandJoe such greatsasPaul“Bear”Bryant, office and declared: “I’m ready,office anddeclared: Coach. Nextyear, I’mplaying others Reflecting onthatstudent’s passionandenthusiasm,I , butratherhelpingthemtoempower — surpassing even “There isnothingsostable aschange.” “There And fining change. The leadermustdeliverchangebylinkingan fining change. years. Hisverdict:it’s veryhardtoknowwhatwillhappen requires connecting with others. Therefore, aleader’sjobis requires connectingwithothers. Therefore, mon purpose. more thansimplyanticipatingandnavigatingchangeorde- many leadershadtriedtoinspiretheirteamsthepointof ment fromtheirteams. Iwonderedhow Moretothepoint, future intellectually simple, yet emotionally elusive, tenet, the tenet, elusive, emotionally yet simple, intellectually words of the legendary Bob Dylan would indeed be true, be indeed would Dylan Bob legendary the of words it hasforcenturies, makingemotionalconnections with is notsimplyempoweringothers, butratherhelping them issue, alongwithreviews. an individual’s perceivedself-interestintomutual, myopic, around the world as mountainous Liechtenstein has citizens. article quotes studied 82,000 predictions over the last 20 last the over predictions 82,000 studied quotes article what othersachieve.Itisnotaunilateralaction;leadership base inLiechtenstein.Hiltiemploysalmostasmanypeople today.problems of Inthisissue,wealsolookatHilti,aglobal throughs, goodiesandgadgets, leadership stillrequires, as to empowerthemselves. Notwithstandingthe break- all of the focus of a 209-year-old company to emphasize solving the tomorrow. aremanyotherinterestingarticlesinthis There heroic aspirations. If more leaders were to remember this remember to were leaders more If heroic aspirations. do so, theleadermustbecorrectivelensthattransforms leadership meansenablingpeopletoactualizetheirown longing to be part of somethingbiggerthanthemselves.longing tobepartof To us rememberthatthebridgebetweendesireandoutcome company producinghigh-qualityindustrialproductsfroma executive,focusesonhowshe’schairman andchief shifting shared interestthatisalignedwiththeorganization’s com- sent. This issue’s interviewwithEllenKuhlman,DuPont’s This sent. son. It’s notaboutwhattheleaderaccomplishes, butrather saying thosewordsorsomethingsimilar. others aroundtheirmostbasichumanneeds. Ultimately, organization’s purpose Briefings takes a look at why it’s so difficult to predict the , the power of changeisnotab- Briefings,thepowerof In thisissueof In an era of dynamicandevencataclysmicchange,let In aneraof The The essence of leadership revolves around the other per- — and whattodoinstead.Oneresearcherwhomthe themselves — its reasonforbeing The Korn/ f . — erry i to people’s e T u T i nsT

Leo Acadia of Enjoy the Full Value Ha6211 promo code Enter Order Nowatwww.kornferrybriefings.com • • Web-exclusive content • Downloadable color PDFs of all magazine articles • The complete library of Briefings archives online • Unlimited online access to premium content from the magazine Premium Membershipentitlesyouto: facing today. on business strategies and the key talent management issues that executives are Leadership, you’ll have exclusive access to insights from top thinkers and leaders With a Premium Membership to The Korn/Ferry Institute’sBriefingson Talent & Become aPremiumMemberToday. exclusive destination for executives to convene and hone their leadership skills. preeminent behavioral research library. The magazine’s website also serves as an which draw on groundbreaking research from the firm’s unparalleled expertise and The Korn/Ferry Institute’sBriefings offers distinguished narrative on topical issues, Briefings on Talent &Leadershipfor$89.99 PLUS an annual subscription to the quarterly print edition of Briefings Online l atest thinking

traffic control, engineering and all kinds of interesting... scientific and medical research. In health SAY WHAT? care, for example, huge data streams distributing the task to clusters of hun- from electronic medical records, medical powerpuff presentation, n. dreds, even thousands, of computers. imaging and pharmaceutical and genetic A PowerPoint presentation containing lots The Big Data Effect Companies like Bank of America, research are being analyzed to identify of flashy animations, cool pictures, and all Dell, eBay and Wal-Mart Stores each the causes of disease and options for pre- sorts of other snazzy Will the rise of massive data analysis change the nature of gimmicks, but almost store petabytes (one quadrillion bytes) of vention, diagnosis and treatment. decision making and leadership? entirely lacking in enterprise data. The Walt Disney Com- As the volume and availability of data any real substance. pany uses a Hadoop cluster to analyze have grown and the analytical tools to Source: Urban Dictionary wo years ago, Andreas Weigend, phones, Web search streams, page views, patterns across diverse customer data parse the data have become faster and former chief scientist of Amazon, offered ad impressions, e-mail metadata, search such as theme park attendance, pur- more sophisticated, there has been a the stunning prediction that human be- engine queries, social networking activity, chases from Disney stores and viewership growing trend toward trying to find pat- ings would generate more data in 2009 UPC bar code reads, RFID scans, GPS lo- of Disney’s cable television programming. terns in “unstructured” data — informa- than in all of prior human history. Today, cation data, industrial plant monitoring, LinkedIn processes the interactions of tion streams that do not conform to any that statement seems archaic. According weather and seismic data, automotive more than 100 billion relationships a day. preconceived model and may not even ation, consumption over creation.” retain an ethos of critical and contextual Tto Eric Schmidt, chairman of Google, we sensors, photographs — and more. “It turns out that having 10 times the have any immediately apparent rele- Rushkoff might get no argument thinking. As Kevin Kelly, author of “Out of are adding nearly that much information Business and nonbusiness enter- amount of data allows you to automati- vance to one another. “In the past, all from business users of big data, who are Control,” the classic book on hive intelli- to the human database every two days. prises are scrambling to leverage this con- cally discover patterns that would be im- too often what were disregarded as ‘out- generally more interested in what works gence, put it: “In the coming world of We are now living in what the tech- tinual data deluge using cloud technology, possible with smaller samples,” said Peter liers’ on the far edges of a data model and what sells than in causation theories. cloud computing, perfectly good answers norati have dubbed the era of “big data.” which makes data storage and services Skomoroch, a principal data scientist at turned out to be the telltale signs of a Still, the idea that with enough data and will become a commodity. The real value Gargantuan data storage systems bulge available on demand from remote com- LinkedIn. micro-trend that became a major event,” enough computing power the right an- then becomes asking good questions.” with the digital detritus of everyday life, puter networks, and software frameworks Big data analysis is also becoming the wrote Brett Sheppard, executive director swers inevitably emerge is likely to In that world, perhaps we should not inexorably generated by computer sys- like Apache Hadoop and Google’s Map- norm in government, economics, intelli- at Zettaforce, in “Putting Big Data to change decision making, planning and be too quick to dismiss intuition and ex- tem logs, electronic transactions, cell- Reduce, which rapidly analyze data by gence, meteorology, architecture, air Work: Opportunities for Enterprises,” a the very definition of what constitutes perience as the outmoded results of whim recent report published in conjunction talent and leadership in organizations. or bias. They are, in fact, the results of with the GigaOM Network. “Now, letting “The continued merging of business our brains engaging in some big data pro- data speak for itself through analysis of and technology and the resulting inten- cessing of their own, constantly sifting entire data sets is eclipsing modeling sity of competition is driving down the through a welter of conscious and uncon- from subsets.” market share of intuition and experience scious inputs to our senses, storing them Chris Anderson, editor in chief of as a basis for decision making,” said An- in the cloud of our awareness and proces- Wired magazine, was one of the first to put drew McAfee, principal research scientist sing them rapidly and on demand with forth the notion of big data “speaking for at The MIT Center for Digital Business, parallel and distributed efficiency to help itself.” In a 2008 article entitled “The End whose work focuses on how technology us make decisions. All in real time, no less. of Theory” he wrote, “This is the most is changing the structure, behavior and There is no doubt that the availability measured age in history. We can throw the performance of organizations. “We need of prodigious amounts of data along with numbers into the biggest computing clus- to apply the best methods possible to the statistical tools to slice and dice them ters the world has ever seen and let statisti- our decisions, and those methods will in- will greatly enhance our ability to observe cal algorithms find patterns where science creasingly be algorithmic, automated and codify the world. But if those become cannot. We can analyze the data without and data based. But that does not get rid the only tools we use, then creativity, in- hypotheses about what it might show.” of the obligation to create theory.” spiration and understanding will become Anderson’s article drew strong reac- According to McAfee, the skills that little more than the outputs of statistical tions from the scientific community; will be valued in the coming world of probability. The role of big data may best many scientists suggested data analysis, work will blend and balance high literacy be put into perspective by a sign that is big or otherwise, without hypothesis or with high numeracy — an integrated flu- said to have hung in Albert Einstein’s of- theory is not science at all, but rather, in ency with both conceptual and statistical fice at Princeton University: “Not every- the words of Douglas Rushkoff, an author reasoning. If so, that would imply that or- thing that counts can be counted, and and media theorist, “mindless petabyte ganizations rushing to embrace raw data not everything that can be counted Hal Mayforth Federico Jordan

Tk churn [that] favors industry over consider- analysis would do well to also vigilantly counts.”

8 Q4.2011 The Korn/f erry i nsT i T u T e Briefings on TalenT & l eadership Q4.20119 l atest thinking

rich German banks, Mittelstand invest Germany Plays heavily in research and development and tend to develop highly specialized niche products. to its Strength “There is a long list of specialty areas in which even remarkably small German Specialized manufacturing, high-quality domestic production makers dominate world markets,” said and enlightened labor policies have made Germany the Eamonn Fingleton, author of “In Praise world’s leading exporter of Hard Industries.” Windmoeller & Hoel- scher, for example, has a 90 percent share of the world market for machines ony Blair, the former prime min- in the manufacturing sector and specifi- that make heavy-duty paper bags. ister of Britain, once asked German Chan- cally in machine tools. There is global Achenbach Buschhütten is similarly cellor Angela Merkel why her country’s demand for that value proposition, espe- dominant in the market for aluminum- economy was so resilient. Her response cially in emerging markets that are in the rolling mills. Tente specializes in heavy was at once playful, a bit chiding and very process of building out their own physical duty casters for industrial use, Hegra Lin- matter-of-fact: “Mr. Blair, we still make infrastructure and production capacity. ear produces low-friction shelves, slides Tthings.” Indeed, over the past decade, “Increasingly, German companies are pro- and drawers and Würth is the leading in- Germany has emerged as Europe’s dom- viding China, India and other emerging dustrial supplier of assembly and fasten- inant economic power because it has economies with the high-tech precision ing materials worldwide. Mittelstand have chosen to stake its fortunes on manufac- tools they need to become the mass pro- also established themselves as high- turing and exports when many others duction factories of the world,” said Ste- quality, niche leaders in biotechnology, were feasting on a profligate financial in- ven Hill, author of “Europe’s Promise.” medical technology, nanotechnology dustry and debt-fueled domestic con- In 2010, total German exports — and renewable energy. sumption. Even more interesting is that not only to China and India, but also to All of this is predicated on having a viable against low-cost, global competi- from a government fund that accrued in sense of common destiny” and stimulate Germany did so while pursuing labor- the United States, Russia, the rest of Eu- highly skilled and stable work force, and a tion. That is one reason Germany has better times through payroll deductions its consumer spending to support the friendly policies that limited outsourcing rope and elsewhere — jumped 18.5 per- good deal of German public and private not embraced outsourcing to the degree and company contributions. As a result, European economy as a whole. Merkel, and unemployment and gave most Ger- cent and currently account for roughly policy has been aimed at achieving that other countries have. Gary Herrigel, a the government and employers spent less however, has taken the position that Ger- man workers healthy salaries and bene- one-third of Germany’s $3.35 trillion through cooperation between manage- professor at the University of Chicago, to keep workers at their jobs part time many’s export engine benefits all of Eu- fits, high job security and a real voice in gross domestic product. In the steel in- ment and labor. A policy known as “co- cited the example of a company that while retaining their productivity than rope and that the answer is not to reform their companies’ boardrooms. dustry, ThyssenKrupp now outproduces determination” allows German workers made ball bearings for the shipbuilding they would have spent on full unemploy- German policy, but rather to strengthen Today, German wages and benefits United States Steel. In the electrical in- in businesses of more than 2,000 em- industry. “The task of polishing and as- ment benefits with no productive return. the weaker economies in the euro zone. are among the highest in the world — in dustry, Siemens’ exports were up 30 per- ployees to elect half the board of direc- sembling the bearings was considered There have been other benefits as well. Merkel’s is a compelling argument. manufacturing industries, they are about cent. The German auto industry, tors. Companies of all sizes have “works too labor intensive for German workers. Reduced worker turnover has made com- Herrigel has pointed out that compared 50 percent higher than in the United including companies like Volkswagen, councils” of elected employees that meet As a result of works-level consultation, panies more willing to invest in vocational with Spain, Ireland and other countries States. Yet Germany is also the leading Daimler, Mercedes-Benz and Porsche, with management to discuss budgets, however, the trade union suggested new, training and technical apprenticeships. in the euro zone whose growth was “dis- exporter in a world driven by lowest-cost now represents 17 percent of global ve- mergers, layoffs and even plans to intro- more efficient work procedures that Increased job security has encouraged torted by the financial bubble, Germany’s production. There are a number of expla- hicle production. duce new processes and technologies to made it preferable to retain the entire workers to see the introduction of new, growth has always been healthier and nations for this. Central among them is But Germany’s real competitive ad- the workplace. production in Germany.” more efficient technologies and proces- the wealth it created has been more sus- that, when it comes to competing in vantage in international markets comes While this culture of consultation To support the retention of domestic ses not as a threat, but as a boon to their tainable.” In fact, for many developed global markets, high wages can be more from its smaller, often family-owned en- may seem to be an open invitation to la- production and to keep Germans working jobs’ long-term viability. countries that have been frantically trying than mitigated by the skill of the work terprises, many of which are manufac- bor strife and wage inflation, research during the recent economic crisis, Chan- Although Germany’s labor policies to figure out how to compete in a world force, the efficiency of processes, the turers. Collectively known as Mittelstand, has shown that it has led to greater effi- cellor Merkel instituted a highly success- have fueled its worker productivity, export of low-cost emerging economies, Ger- quality of products and some helpful these companies employ more than two- ciency and productivity. In fact, despite ful policy known as kurzarbeit, or “short dominance and current-account surplus, many may be providing a realistic and public policy. thirds of all German workers. Encouraged significant unionization, German workers work.” Instead of laying off millions of they have so far done little to boost the much-needed model for success. Even The Germans have long focused on by the government through tax breaks tend to take moderate and flexible nego- people, firms kept many workers on the country’s domestic consumption. French as legislators and consumers have lost efficiently producing quality products that and depreciation allowances and sup- tiating positions in an effort to help their payroll at reduced hours. The wages lost Finance Minister Christine Lagarde has focus, companies increasingly embrace

can command a premium price, notably ported with debt financing from cash- employers — and themselves — remain © Oliver Krato/dpa/Corbis by those workers were largely reimbursed complained that Germany must show “a sustainability as smart business.

10 Q4.2011 Bergonzi_Latest_thinking_germany_LC_6_5_11.docx The Korn/f erry i nsT i T u T e Briefings on TalenT & l eadership Q4.201111 l atest thinking

tough times, have taken a step back. A emissions and waste generated by cus- has carefully defined the parameters of interesting... 2011 Harris poll found “adults in Amer- tomer use of those products. Wal-Mart sustainability to avoid running up against THE SHRINKING ica are now less likely to engage in green Stores has instituted a series of five-year the basic formula of how it operates and Sustaining OFFICE CUBICLE behaviors in their daily life” than they goals that address sustainable sourcing grows. Glaringly absent is any mention were two years ago. Also in 2011, a Gal- and waste reduction in the food supply of sprawl or land use [or] how the big-box The workplace is shrinking more now than ever. Currently, Sustainability lup poll showed Americans giving priority chain, including a plan to sell $2 billion format that Wal-Mart pioneered has the average square foot per to economic growth over environmental in food sourced from small and medium- led to a sharp increase in the number of Even as legislators and consumers have lost focus, companies employee is 200 (18.5m²) and protection by the largest margin in the size farms by 2015. miles Americans drive for shopping.” is expected to drop closer to increasingly embrace sustainability as smart business. last 30 years (54 percent to 36 percent). However, the report also identifies Others point out that not only does Wal- 50 (4.5m²) by 2015. 500-700 sq In the words of Joel Makower, chairman some broad areas of minimal or no prog- Mart’s business model encourage fre- ft (45.5-65m²) was the norm in he recent global recession’s political will greatly reduce the prospects and executive editor of GreenBiz Group, ress and concern. Electronic waste con- quent consumption and disposability, but the 1960s. many adverse consequences included for legislation promoting sustainability. “Saving the earth has taken a back seat tinues to grow dangerously, as does the it has also induced domestic suppliers to Source: Jones Lang LaSalle the robbing of a good deal of momentum In 2010, Congress delayed spending on to simply saving the day.” rate at which we are creating greenhouse take their operations to lower-cost coun- from the fledgling green economy. In the transit systems and deferred creating This stands in stark contrast to the gases. Organic agriculture still represents tries, where environmental impact con- United States, changes in the elected clear policy on alternative and renewable trend among corporate leaders, who are less than 1 percent of all U.S. cropland. trols are minimal and from which goods leadership and a general weakening of energy. Even consumers, faced with doubling down on their sustainability ef- And, although recycling efforts are laud- have to be transported great distances on T forts, to a large degree because of the able, most of them amount to getting petroleum-fueled container ships. challenging economic times. In the past just one additional use out of a given ma- Some believe that the existing share- year, many companies seem to have terial or item before it eventually ends up holder-driven model of corporate re- crossed over from viewing sustainability in a landfill. The ideal of a closed-loop sponsibility makes companies like Procter as a smart marketing tactic or a regula- society in which everything is eventually & Gamble and Wal-Mart intrinsically tory obligation to seeing it as an ele- recycled into new products, raw materials incapable of real sustainability. “It’s mental strategic driver. According to the or benign organic components is still a plain to me that market leaders have an GreenBiz Group’s recent report, “The distant goal. inherent disincentive for radical innova- State of Green Business 2011,” a grow- That lack of progress on several fronts tion,” said Adam Lowry, co-founder of addition, not an alternative, to share- ing number of executives view sustain- frustrates many. “Those of us who have method, makers of nontoxic, biodegrad- holder-driven capitalism. They believe ability — whether in the form of reducing been watching green business trends for able household cleaning products. “Dis- market mechanisms are already in place waste, improving efficiency or finding some time are getting impatient with ruptive new ideas require a company to to reward companies that find ways to new business opportunities — as the key the pace of change,” Makower said. “It’s cannibalize itself. That’s incredibly risky simultaneously serve their shareholders, to competing in an increasingly resource- time for bigger, bolder, more audacious for a business that has incumbency.” their customers, their employees and constrained world. changes in what companies do and how The nonprofit organization B Lab their communities. On a company by company basis, they operate.” proposes to help change that dynamic “Capitalism is by far the best system the GreenBiz report details a good deal Marc Gunther, a contributing editor by introducing a new kind of corporate ever created for allocating resources, but of progress, especially in the areas of re- at Fortune magazine who also writes for legal structure called the Benefit (or B) there are market failures that require cycling and waste reduction. Some Kraft GreenBiz, offered an example: “Procter Corporation that meets rigorous, inde- smart regulation,” said Farron Levy, presi- Foods plants, for instance, use the whey & Gamble sets carbon intensity targets, pendent standards of social and environ- dent of True Impact, a consulting com- left over from making cream cheese to meaning that it will produce its products mental performance and accountability. pany that helps organizations measure make enough biogas to generate 30 using less energy, but because of the com- In return, B Corporations receive en- the social and business value of their percent of the plants’ energy. Dell has pany’s growth imperative, it will pollute hanced brand equity, service partnership operating practices. “The value of B Lab reduced packaging volume, thereby re- more, not less, in absolute terms. I just discounts and tax breaks. B Lab’s stated is not regulatory, however, but how it ducing production, storage and trans- wonder whether the emerging orthodoxy mission is “to create a new sector of the helps companies be more attentive to portation costs. Ford Motor Company, of green business, one that is willing to economy which uses the power of busi- their overall impacts. Ultimately, B Lab Stonyfield Farm and Procter & Gamble settle for incremental changes, is going ness to solve social and environmental supports a concept that too often gets each have introduced petroleum-alter- to get us where we need to go.” problems.” B Lab’s certification and ad- lost these days: the purpose of business native packaging made from a wide Stacy Mitchell, a senior researcher vocacy efforts seek to redefine fiduciary is not to make a profit, but to create range of biodegradable commodities. with the New Rules Project which seeks duty to include having a positive — or at value, which earns profits. Value capture Unilever has focused on the impact of to promote sustainable policy, provided a least not a negative — impact on society without value creation is a recipe for its supply chain, from the farms that sup- similar insight: “Wal-Mart’s eco-commit- and the environment. disaster, as our financial industry has Hal Mayforth

ply raw materials for its products to the Tk ments are not without substance, [but] it Many laud the B Lab approach as an so well illustrated.” Yuko Shimizu

12 Q4.2011 Bergonzi_latest_thinking_sustainability_lc_6_5_11.docx The Korn/f erry i nsT i T u T e Briefings on TalenT & l eadership Q4.201113 14 point V iew manners, please! mind your digital Advances in electronic technology havegivenusunlimitednewwaystopayattention Advances inelectronictechnology Q3.2011 and infinitenewmeanstocommunicate.Sowhydoesitallseemsorude? you’re communicating is that you’re apainintheass. communicatingisthatyou’re you’re searches everytwominuteswithinstantmessaging,what Web breakingintomy you’re nicate. Although,thatsaid,if wide openandshe’s watchingthemovie. drive-in andkissingyourdaterealizingshehashereyes and Irememberthistoowellfromhighschool ners. Imagine,20 yearsago, beingcaughttwiddlingyour a nanosecondbyclicking“replyall.” boring clientoranunbearablecompetitor. Today, theydo it in months, tobedrivennutsbyalousyboss, acrazyco-worker, a now takesplaceinstantaneously. Itusedtorequiredays, even isthathumaninteraction nuts.What’s rudeabouttechnology everythingthatdrivesus good thingsandalsothesourceof we’re supposedtobetalking,Igethurtfeelings.we’re It’s like In away, interesting... Source: Ernst&Young least likely. are amongthe those inNorway cash bribes,while are mostlikelytopay in GreeceandRussia their company. Employees unaware ofananti-briberypolicyat win businessandnearlyhalfare to offercash,giftsorentertainment companies acrossEuropeareprepared More thanathirdofemployeespolledatlarge EUROPE’S TOP COMPANIES BRIBERY ANDCORRUPTIONPRESENTIN Etiquette isabouthumaninteraction justtryingtocommu- I’m No, notaskingyouout. I’m Technology badman- createswholenewcategoriesof Pay attention! When you’re foolingwithyourPDAwhile you’re When Pay attention!

being politeboilsdowntotheabilitypayattentionandcommunicate. O’Rourke_Viewpoint_6-6_jk[1]FE.doc — the source of all the sourceof — going tothe — then tellhim,“Go straightto358MadisonAvenue,Suite401.” don’t makethepostmanwaitwhilewescribbleareplyand greaterimportancethane-mails,Letters areoftenof but we gotbeer!” chirp, “You’ve reading e-mails, butwhenIopentherefrigerator, itdoesn’t properly hydratedis, afterall,morecrucialtomyhealth than thrown outawindow. isrude.Staying computeritself The phone, whichcanbesnatchedfromsomeone’s handand stalls downIheard,“Iloveyou.” Ihopehewasaloneinthere. phones, Iwasinthemen’s roomatLaGuardiaandfromthree cell- during theconversationisaflush.Inearlydaysof “Sell theLehmanBrothersstock!” forever andhaveyettohearanythingworthshouting,like, beenoverhearingcellphonecalls Leaguers tostealthird?I’ve ing doneatthesamevolumeusedbydadsurgingtheirLittle next Fukushimaearthquake.Andwhyisallcellphonetalk- ther, thevibrationissostrongthateveryonethinksit’s if the getthatlater.”“I’ll Settingphonestovibratedoesn’t workei- their phonesring,glancingattheLEDdisplaysandsaying, akittenuptree.Othersjustlet is beingmurderedwhileI’m 911andeverycaller thing toanswertheirphones, they’re asif gadget withbuttonsmakeitO.K.? doesanexpensivelittle Why thumbs inabusinessmeeting. summer job in the mailroom of a big corporation. One of our abig corporation.Oneof summer jobinthemailroomof roamed theearth,Ihada Back whendinosaursandL.B.J. was theoriginalvillaininplot towasteeverybody’stime. mailer’s mindcontained. amindisthesamedirtyjokethatlaste- ten thecontentof notahumanUSBflashdrive.Andit’s amazinghowof- I’m theirminds.seems tobeletpeopledumpthecontentsof The purpose of e-mail purposeof The People expectimmediateresponsestoe-mailmessages. Or maybee-mailisevenmoreobnoxiousthanacell- onthecellphone,lastthingIwanttohear Also, I’m if Somepeoplestopevery- cellphoneisstilltheworst. The It’s the league of evil office equipment. Thephotocopier It’s eviloffice equipment. theleagueof

By P.J. O’Rourke — like the purpose of blogging like thepurposeof The Korn/ f erry i e T u T i nsT —

Hal Mayforth

Briefings onTalen T Michael Witte market usedtodothetalking.Now it’s opinionmobrule. futures? Peoplewhoknewthemost aboutthecommodities body’s anexpert. Suddenly,participant hashisorhersmartphone out. every- days, inconferences, committeesand board meetings, each stroom wall. ing isonestepabovewritingaphonenumberonpublicre- the wholeEuropeanUnion.AndaverageFacebookpost- andwegetthesilenttreatmentfrom about sovereigndebt, Nowdoingitwitheveryone.Onecarelessremark out. we’re all dothatwithourspouses, andweknowhowthat turns Point toexplainit. itisn’tplained byPowerPoint, complexenoughtousePower- after decade. son thatbigcorporationsusedtostayinbusinessfordecade Bartworthdealstinks.”said, “The Suchefficiencywastherea- went downthehall,knockedpolitelyonofficedoors, and Instead,theexecutives that nocorporatememosweresent. resultwas Mimeo-ink coloredshirtswerenotacceptable.The chine becausewewererequiredtowearwhiteshirtswork. We mailboyshatedrunningthemimeographma- above). mimeo stencilsontheirtypewriters(peopleunder40, see retaries (peopleunder40, Google“secretary”) hated cutting ple under40, Google“mimeograph”). executives’sec- The responsibilities wastomimeographcorporatememos(peo- Should wemaintainashortsell positioninmagnesium Not thateveryelectronicrudenessisintentional.These We speakingbeforeyouthink. Tweeting isjustawayof it’s wastingtime,if Speaking of simpleenoughtobeex- &l eadership back on Twitter! on back is Weiner Anthony Congressman Whoa! … the of some as rude as wouldn’tbe it But misinterpreted. be could This regulators.federal and stockholders,bankers investment of knees the on muzzles their resting and tails their wagging start executives business that suggesting not I’m knee. my on muzzle her rests and tail her wags she bargain, hard a driving way.her gets she’susually really she And When growl. sional occa- an and whines barks,few a of couple a with municates retriever,Labrador com- my She is Georgie. address.This e-mail no and site Web no iPad, no kind, any of phone no has deals) make to easiest is it whom with one the (and life my in presence courteous most The experience. from speak I all. at plains thewayTigerhasbeenplaying. hisbackswing?Maybethatex- pause totextinthemiddleof We eveninterruptourselves.Woods rupted. DoesTiger and afortuneislost. boom collapsed.” screen doorsaleshaveplungeddrasticallysincethehousing Magnesiasaleswillskyrocket.” Milkof mographic. Fundy.”Bay of magnesium in seawater.supply of Maybe we should short the The most polite existence wouldn’t have technology in it in technology wouldn’thave existence polite most The totechnology,Thanks continuallybeinginter- we’re Meanwhile, magnesiumgoesto$5,000permetricton “It’s akeyingredientinaluminumalloys, andaluminum reachingthepeakyearsforindigestionde- “We’re “Look atthepricesonthesemagwheelsformy’Vette!” “AccordingWikipedia, there’s toanalmostunlimited Q3.2011 15 16 Q4.2011 By David Berreby The Korn/ f erry i e T u T i nsT

Credit

Briefings onTalen T Credit &l eadership Q4.2011 17 18 Q4.2011 Berreby_Prediction_5-17[1]FE.doc quence of revolutions; the failure in Japan of nuclear-safety dence.” Naturally, leadershavealwayswanted totamethefu- fluence in a comfortable resort town, not a far-off cave. As erals didn’t makeamoveuntiltheyhadreadtealeaves, or of of 2001, the clues proved easy to read forecasts now are touted as a combination of relevantdata, forecasts nowaretoutedasacombinationof permarket of ideas,”permarket of asTetlock andtheyall touttheir callsit, productsofferedin plenty of “theforecastingaisleinthesu- powerful theoryorsomeskilledmath.Certainly, thereare Tetlock’s premise in this venture is that today no one really rigor andpower. scopes. and Inourtime,thingsaresupposedtobedifferent, said, is“thetakinggooddecisionsoninsufficientevi- artof measures that were predicted to withstand all possible disas- ters; and the discovery of Osama bin Laden still wielding in- the experts. In 2011 alone, had we’ve the Arab world’s se- bird entrails, orcloudformations, or, course,theirhoro- of ture’s uncertainty. Intheancientworld,sovereignsandgen- Young once Wayland asthelateBritishpolitician their work, with the financial meltdown of 2008 or the terrorist attacks knows how to make sound predictions. how well, I can’t predict. I have no clairvoyant talent. But then logical analysisandspecialinsight Yet every year brings shocks that contradict or surprise That’s notwhatleaderswanttohear,That’s course,because of Pennsylvania. at the School Wharton at the University of the words of Philip Tetlock, a psychologist the fine art ofwell-calibrated judgment,“ in few thousand other people, I will “cultivate cultural, maybe even personal. Along with a make better forecasts Over the next four years, I hope to learn to he other day I signed up to become a seer. How I will hone my skills, and The Korn/ f — — born of experience,a born of “in the rearview mir- — political, economic, erry i e T u T i nsT

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Briefings onTalen T Credit — analytic tools, whycan’t wegetmoreleverageon as General David Petraeus has said of a very dull algorithm (for instance, “always predict more of a verydullalgorithm(forinstance, “alwayspredictmoreof for alongtime.Overtwodecades, startingin1983, heand pick amongthreechoicesfora political oreconomictrend researchers endedupconfirmingtheC-suite’s worst fears: reader was as good as the pundit. reader wasasgoodthepundit. ror, not through the windshield,” Experts werenobetteratpredictingwhatwouldhappenin more of it, thesameasnow, gavethemaway it, more of That it. orlessof their fieldthantheywereatpredictingwhatwouldhappen tators. Comparingalltheseforecastswithactualevents, the to macroeconomicsdiplomacy, anintelligentnewspaper the future?Tetlock hasbeenworkingonthatquestion turning points in war. those options. The results were not inspiring. If youhadused resultswerenotinspiring. If those options. The pickingamong to comparesuccessrateswithother meansof in areaswheretheyhadnospecialexpertise.Inotherwords, when themetricwasbasicaccuracy his colleagues collected 82,361 distinctpredictionsonpo- his colleaguescollected82,361 litical trendsfrom284professionaladvisersandcommen- expertise addednovalue.Foranygivenfield,fromChina With allourdigital-ageinformationand Then, too, theresearchersoftenaskedtheirexpertsto Then, &l eadership — did thishappenornot? — dynamic. Whether thecomplexsystemis world’sweather Whether dynamic. complexity:Incomplexsystems,quence of eachpartisaf- and PowerPointprojections, thanthe Roman arenobetteroff consuls whoreliedonaharuspexandtheoracleatDelphi. youwouldhavedonebetterthantheexperts.color target, fected by the actions of manyothersin aconstantlychanging fected bytheactionsof or amarketglobalindustry, thereisapointonthefuture asTetlock physicalaspect, issimplyaconse- pointsout, The the possibilities. why forecastsaboutwhatislikelyto That’s the same”) youhad orevenif horizon beyondwhichit’s simplyimpossibletocalculateall used achimptossingdartsatthree- The trouble is a combination of physicsandpsychology. troubleisacombinationof The So itseemsthattoday’sleaders, foralltheirwhite papers Q4.2011 19 20 Q4.2011 quo.We tendtothinkthatwhathasbeenwillbe,and quakes orrecurrentrevoltsagainstdictatorsintheMideast conventional wisdomtendstopredictincremental,reas- events are rare. In fact, extremeevents(likePacificRimearth- events arerare.Infact, thisfamiliaritybiasisastrongpreferenceforthe ern formof eophones androcketryfortourists, butimaginedthatthese give upthatreassuringassumption. from the shape of the human mind. We’re notgoodatseeing We’re thehumanmind. from theshapeof of awar of political stability of anyparticularnation, thelikelyoutcome political stabilityof suring forms of change:noshocks,suring formsof nocollapses, noextrem- surements willbethemostcommonand“outliers” willbeat six months. simply a fact of nature and of historythatmanyeventsdon’t natureandof simply afactof the long thin tails of the bell curve. We tellourselvesextreme thebellcurve. the longthintailsof their 1950’s-style homemakerwives.) Oneparticularlymod- that wearen’t goodatit. the futureclearly, andevenworseatdealingwiththeproof than thoseaboutwhatwillhappenin this year)canhappenrepeatedly, andinquicksuccession.It’s ists, nobigsurprises. (Decadeslater, course,theresultscan of normal distribution, in which the average of any set of mea- anysetof normal distribution,inwhichtheaverageof new technologieswouldbeusedbypipe-smokingdadsand we estimatewhethertrafficon theInterstatewillbeheavyor happen tomorrowaremorereliable have a normal distribution. But many of usarereluctantto have anormaldistribution.Butmanyof we careabout look hilarious large-scale shocks are rare and nearly impossible. This iswhy large-scale shocksarerareandnearlyimpossible.This But amuchbiggerproblemarises We also tend to forget that for most of thepredictions We alsotendtoforgetthatformost of For one thing, people have a bias in favor of thestatus For onething,peoplehaveabiasinfavorof — the “objects” theforecast arepeople.Sowhen of — — the state of theworldeconomyin2012, the the stateof like sciencefictionstoriesthatforesawvid-

O described theirviewsaboutvarious hot-buttontopics. answer is 14.6 answer is14.6 a stock, wehaveto predictwhatotherpeoplearepredicting. a stock, about the minds of competitors.about themindsof everysingleonewaswell- If already believe. This iswhatpsychologistscall“confirmationalready believe.This are notequalintheirexpertise,sothetheoreticallyrightan- anyone tocarryaconcealedgun, liberalsarelikelytosaythat and (b)continuetodisagreeaboutthefacts? When there is a genuine scientific consensus on some topic, thereisagenuinescientificconsensusonsometopic, When conscious preferenceforinformationthatjibeswithwhatwe out to be 18. That, Tetlockout tobe18.wasabouthalfwaybe- pointsout, That, right answer; but if everyoneconvergeson22 thentheright right answer;butif son says, yourdecisionreliesonwhatyouknowaboutevery- orabrokerfeelingoutthemoodof strike amilitaryoutpost, swer wasn’t accurateeither. thecorrectanswerturned Infact, series of ingeniousexperimentsaroundasensiblequestion: series of versed ingametheory, Tetlock theywouldguess pointsout, man andHankJenkins-Smith,mappedhowthisworksina body else’s choice.Predictionsoftenfailbecausetheydon’t Miami’sbar willbetoocrowded,theUniversityof Neil John- yourfavorite the exchange,orjustsomeonetryingtoguessif bias”: What shores up our beliefs is easy to accept, whilethat shoresupourbeliefsiseasytoaccept, bias”:What tween thenaïveanswer(33)andtoo-cleverone(0). tos and credentials of variousfictional scientificexpertsand tos andcredentialsof zero (knowingthateveryoneconvergingon33makes22 the which challenges them is easy to suspect. which challengesthemiseasytosuspect. why dopeoplesimultaneously(a)saytheybelieveinscience light, for example,orwhether“thelight, market” isgoodforselling Whether youareaguerrillatryingtodecidewhen Whether To examinethis, theresearchersshowedpeoplepho- Firearms policy was one. If astate’sFirearms policywasone.If lawspermitalmost Dan Kahan at YaleDan Kahanat LawSchool,alongwithDonaldBra- take into account the effect of otherpredictions.take intoaccounttheeffectof Tetlock The Fi- acontestrunyearsagobyThe cites theexampleof The realnumberwaslower.The nancial Times.Readerswereaskedtoguesswhatnum- Finding therightnumberrequiredsomeknowledge ber from 0 to 100 would equal 66 percent of theav- ber from0to100 wouldequal66percentof erage guesses of alltheotherentrants.erage guessesof Assuming trying to psych out the strategies of otherpeople. trying topsychoutthestrategiesof that otherpeoplewillguessatrandom,theaver- age numberfor100 choicesshouldbe50, andtwo- take intoaccountthatotherpredictorswerealso swer. werewayoff,becausetheyfailedto They thirds of thatis33.thirds of Manyreadersofferedthatan- the rest of us.the restof One,forexample,isastrongun- f course,expertsaresupposedlytrainedtore- f — sist the biases and blind spots of theordinary sist thebiasesandblindspotsof mind. Sowhydon’tthereasonis they?Partof that they share other forms of prejudicewith that theyshareotherformsof and soondowntozip).Butallparticipants The Korn/ f erry i e T u T i nsT

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Briefings onTalen T Credit &l eadership Q4.2011 21 22 Q4.2011 don’t andtheyButmanypeople increaseit, reduceit. (hierarchical and individualistic). When theygavetheirleft- When (hierarchical andindividualistic). decrease incrime,ascitizenswillhavethemeanstodefend a National ResearchCouncilreviewin2004, “concealed carry” at oneanother. Conservativesarelikelytosayitwillcausea crime, half of themsaidhe cluded thattheselawsdecrease of crime,half expertise of thelearnedDr.expertise of Williams. prefer todefendtheirworldviewthanacceptthatconclusion. fects because, Kahan says, neither side is correct: According to story. AsHollywoodhaslongknown,aconvincingnarrative of conservativeswhoreadthatpassageendorsedthesound of Williamscon- other leftiesreadadifferentpassageinwhich people accordingtobasicvalues, whichcorrespondpretty 80 percent of the liberals agreed that Williams wasatrust- theliberalsagreedthat 80 percentof makes aforecastappealingwhenithasmultipleinterlock- trumps logicandcommonsense.Inthepredictiongame,this We favorexplanationsthatfalltogetherintoasatisfying this: this willcauseariseinthecrimerate,aspeopleblastaway themselves. ish volunteers some writing that showed “Prof. James Wil- ish volunteerssomewritingthatshowed“Prof.James itarian andcommunalvalues)whoinclinestotheright wasn’t trustworthy. Ontheotherhand,morethan80percent well toAmericanconventionsaboutwhoisleft-leaning(egal- worthy expert, whose book they would recommend. When When whosebooktheywouldrecommend. worthy expert, laws don’t havemucheffectoncrimeineitherdirection liams” hadfoundthat“concealed carry”lawsleadtoviolence,

Another pitfall of humannaturethataffectsexpertsis Another pitfallof Kahan andhiscolleaguesworkedoutawaytosort Gun policyisaparticularlynicetestforideologicalef- Hed TK — they armed thanothers. theirexpertisecanbeadisadvan- Infact, and theSovietUnion,sometimein1983.” secondchain The Poland,anda “aRussianinvasionof asked aboutchancesof and theSovietUnion,sometimein1983.” otherwas The Logically, twoseparateeventsis though,theoccurrenceof a flattering servant, happytomakeupmaterial. a flatteringservant, convincing than a bare prediction of “revolutioninCongo.”convincing thanabarepredictionof complete suspension of diplomatic relations between the U.S. diplomaticrelationsbetweentheU.S. complete suspensionof gravitates to this sequence of cause and effect, anditismore causeandeffect, gravitates tothissequenceof groups. “acom- Onegroupwasaskedfortheprobabilityof facts. When youhavemanyfactsatyourfingertips,facts.When though, of events was judged more likely than the first, eventhough events wasjudgedmorelikelythanthefirst, of diplomaticrelationsbetweentheU.S. plete suspensionof sistance to contradictory or new evidence. When theamateur When sistance tocontradictoryornewevidence. tage, researcherssay. becauseexpertscanprovideextra That’s tainly lesslikelyaccordingtobasicprobabilitytheory. the second,requiringtwoseparateeventstohappen,wascer- ing events you’re usedtofillinginblanksfrommemory.you’re Andmemoryis newspaper readerdrawsablankoneconomicpolicyorAsian with foreignpolicyexperts, whohadbeendividedintotwo history, heorshehastoadmitthatdoesn’t haveallthe leading toaspikeinpriceforcobalt.” Intuitively, themind less likely than the occurrence of one. less likelythantheoccurrenceof layers of resistancetocorrection. layers of A recentstudy, tobepublishedthisfallintheJournalof In theearly1980s, thiseffectemergedinanexperiment Experts wrestlingwiththesebiasesaren’t anybetter Detailed knowledgecanbuttressoverconfidenceandre- —

like “revolutionarypoliticalchangeinCongo

through the development of

casts for a broad range of event types,

racy, precision and timeliness of fore-

advanced techniques that

“to dramatically enhance the accu-

Research Projects Activity. ACE seeks

United States Intelligence Advanced

(ACE) Program, sponsored by the

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surveys.crowdcast.com/s3/ACEMore-

The Good Judgment Project (http://

intelligence analysts.”

the judgments of many elicit, weight and combine The Korn/ f erry i e T u T i nsT

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Briefings onTalen T Credit asked 113 undergraduates to compare the merits of twogam- asked 113undergraduatestocomparethemeritsof Xboxes and other aspects of gaming,sotheycouldseparate Xboxes andotheraspectsof feature that neither one had. Their mistakesseemedtobea feature thatneitheronehad.Their fessors Ravi Mehta of the University of IllinoisatUrbana- theUniversityof fessors RaviMehtaof Consumer Research,hasdubbedthisphenomenon“expertise- pertise). When theexperimentwasrepeatedwithoutele- When pertise). expertknowledge(Iknowthisstuff,Idon’tproduct of need werealsomore likelytosayaconsolehad only toone.They sources neededtofoolthemselves.Victorianhistorian Asone Columbia and Amitav Chakravarti of NewYorkUniversity) Columbia andAmitavChakravartiof British theUniversityof Hoeggof Champaign, JoAndrea memories decreased. responsibility,ment of sothatthe“experts” weren’t worried made itplaintothevolunteersthatotherpeoplewoulduse that people would rely on their advice, the proportion of false that peoplewouldrelyontheiradvice,theproportionof Iamcomparingtwo to check)andexpertresponsibility(if takenly saythatbothconsolessharedafeaturebelonged their novicepeers. Specifically, theyweremorelikelytomis- their adviceinmakingaconsolepurchase. them laterinto“novice” and“expert” groups. Further, they to answerquestionsabouthowwelltheyknewPlayStations, tions frommemory. researchersalsoaskedthestudents The items, theyhadbetterbecomparable,orIcan’t usemyex- ing consoles they had invented. The studentshadachanceto ing consolestheyhadinvented.The induced falserecall.” authors(thebusinessschoolpro- The knowledgeable people,then,aretheoneswithmostre- look atspecsforthetwodevices, andthenmaketheirevalua-

These experimentssuggestthatthesavviestandmost These knowledgeable studentsrespondeddifferentlyfrom The

com/s3/ACERegistration

is here: http://surveys.crowdcast.

cations. The online registration form

part, the project is still taking appli-

feedback on his or her results.

niques. Each participant will receive

receiving training in particular tech-

forecasting over the next four years,

the team will participate online in If you’re interested in taking

&l Volunteers who are accepted for eadership

O — dovetail the various parts of theevidence...carriedhiminto dovetail thevariouspartsof a more profound and complicated elaboration of errorthan a moreprofoundandcomplicatedelaborationof are reliable.Anditservestheproducersbygivingthemaway at aprediction;theindividual level,findthebestmeth- clear theslateandtrytoseewhatdoes. thepointof That’s could change.”) two-stepdanceservestheconsumerof This forecasts, byupholdingthereassuringnotionthatforecasts I findithardtosay, thoughIhope,fouryearshence,tohave a setting themselves up to look as if theyarebolderandedgier setting themselvesuptolookasif another,said of “hiscapacityforsynthesis, andhisabilityto some of hismorepedestrianpredecessors.”some of research thatTetlock andhiscolleagueshavesetupasthe ods of training predictors to be better at their art. Amazingly, trainingpredictorstobebetter attheirart. ods of Good Judgment Project. Good JudgmentProject. meld ittoanexplanatoryapparatusthatleavesyouwitha ment. If youwanttobehiredforajob, If ment. youdon’t announce than they really are. The trickistomakeaboldproclamation than theyreallyare.The believes, peopleinthepredictionbusinesshedgetheirbets Instinctively,that nooneseemstobeverygoodatit. Tetlock to stay in business even when they’re wrong,Tetlock argues.to stayinbusinessevenwhenthey’re taken,” or“itwillfissuregivencurrenttrends, thoughthings ment of forecasts,ment of sponsoredbytheUnitedStatesDefense the projectwillmake100 forecastsayear, answeringques- Department’s IntelligenceAdvancedResearchProjects Activ- better idea of howtomakeaguess.better ideaof the bestwaystocombineindividualperspectivesandarrive needn’t usefulwork:Once be.Itcanbearecipeforlineof ity. aimissimplyempirical:atthecollective level,find The nothing like this has ever been attempted. Where willitlead? Where nothing likethishaseverbeen attempted. we admit that forecasting as we know it doesn’t work, wecan we admitthatforecastingasknowitdoesn’t work, wrong.(“Itwillfissureunlessthesestepsare you’re way outif and contrast the success rates of differenttechniques.and contrastthesuccessratesof tions like“howmanynationsintheeurozonewilldefault proaches. That way,proaches. That astimepasses, beabletocompare they’ll “China willfissureintoseparatenationsby 2050” They willalsotrainindividualsindifferentforecastingap- They tively combined into the best form of “wisdom of crowds.” “wisdomof tively combinedintothebestformof ing forwaysthatindividualjudgmentscanbemosteffec- on bonds in 2011?” and“willsouthernSudanbecomean on bondsin2011?” Mellers andDonMoore,willevaluatetheforecasts, look- ect, which is run by ect, Tetlock and the psychologists Barbara independent nation this year?” Researchersontheproj- independent nationthisyear?” All of thiscansoundlikearecipefordespair,All of butit The teamwillbecompetingagainstothersinatourna- The Over the next four years, more than 2,000 members of membersof Over thenextfouryears, morethan2,000 incentives arealignedagainsttestingandimprove- them. Tetlock forone,arguesthatforecasters’ n top of thecognitivetricksthatmindcan n topof for defendingone’s fixing forecastsinsteadof play onitself,therearealsosocialmotives Q4.2011 — and — 23 24 Q4.2011 Hindle_governance_revise_5-20FE.docx.doc The Korn/ f erry i e T u T i nsT

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Briefings onTalen T Credit &l eadership sion_2010-2014/reding/. Web site:http://ec.europa.eu/commis- commissioner’s male boardmembers.” fulldetailscanbefoundonthe The “actively recruitingqualified women toreplaceoutgoing by 2020. theEuropeanUnionsaid,by shoulddoit, They on theirboardsto30percentby2015, andto40percent women within ayearthattheywillincreasetheshareof campaignaskscompaniestopromise board” pledge.The traded companiesacrossEuropetosigna“womenonthe pean Union’s commissionerforjustice,invited publicly needed change. And thatmaynotbethebestwaytobringaboutmuch- speed up, legislationtohastentheprocesswillincrease. legally bindingquotas.changedoesnot therateof Butif room. FewwanttofollowNorway’simposing exampleof glacial paceatwhichwomenareclimbingintotheboard- Hindle_governance_revise_5-20FE.docx.doc Women onBoards Breaking Europe’s GlassCeiling In March of thisyear,In Marchof Viviane Reding,theEuro- Politicians inEuropearegrowingimpatientwiththe Q4.2011 25 26 Q4.2011 least 30yearsbeforeLordDavies’s targetisreached. tors rosefrom17to18, growththatwouldrequireat arateof creased from114to117, executivedirec- whilethenumberof top 100 Britishcompanies. Femalenonexecutivedirectors in- womeninleadershippositions”the representationof at the said, “2010 barelyperceptiblechangein sawanotheryearof watched annualreportonwomeninFTSE100 companies Management’s theCranfieldSchoolof est issueof closely percent arewomen. men andalonewoman,nowhas15directorswhom20 body,male directorstoitsmainboard.The which had12 Lord Davies’s challenge.OnApril1, itappointedtwonewfe- panies intheFTSE100 stockindex, madeanearlyresponseto theEuropeanUnion. that of est companiesby2015, aslightlymoremodesttargetthan Britain’s theboardsof account foratleast25percentof larg- recommendedthatwomenshould Standard CharteredBank, Davies, aformertradeministerandoncethechairmanof thisyear.in Februaryof inquiry, The headedbyLordMervyn inquiry intowhysofewwomenreachboardswerepublished ernment wouldstepinanddemandfirmtargets. theirfemaletopexecutivesby2013,the numberof thegov- companiesdidnottriple ernment ministerthreatenedthatif and thegesturemaynotbeenoughtosatisfyBerlin.Onegov- in leadershippositions.” thesame, soundslikemoreof This and womenontheirstaff gets forincreasingthenumberof that theywouldset“their ownspecificanddifferentiatedtar- way, thegovernmentwouldhavetointervene. 2011, itfailedtomakemorehead- shewarnedindustrythatif derstatement), produced“only modestresults.” InFebruary in 2001 have,ChancellorMerkelsaid(notwithoutsomeun- clined between2004 and2010.Voluntary targetsintroduced womenonboardsactuallyde- states wherethepercentageof country somewhere between Italy and Greece on this measure. Germany’s 200 biggestcompaniesarewomen,puttingthe executiveandsupervisoryboardsat themembersof cent of women intopmanagement“atruescandal.”of per- Only3.2 can countonmyregulatorycreativity.” ithasnothappened,”shesaid,“you on toaddawarning.“If participation indecision-making.” commissionerwent The regulatory initiativesweredevelopedtoenhancewomen’s 8, 2012), thecommissionwillassesswhether“credible self- chance.” Butinayear,Women’s onInternational Day(March the next12months, Iwanttogiveself-regulationalast Lord Davies made it clear that he is not in favor of quo- Lord Daviesmadeitclearthathe isnotinfavorof lat- But LordDavies’s targetisgoingtobeastretch.The thelargestcom- oneof pharmaceuticalgiantGSK, The anindependent Meanwhile, inBritain,thefindingsof nextmonth,Germany’slargestcompaniesagreed The thefewEuropeanUnionmember Germany isoneof In Germany, Chancellor Angela Merkel has called the lack theinvitationwasissued,MsRedingsaid,“For When on the supply of potentialfemaledirectors), andthereisadif- on thesupplyof years forlistedcompanies(relieving thepressuresomewhat 20 percentwithinthree there isanintermediatetarget of publiclytradedcompanies by2016.the directorsof InFrance, a lawrequiringthatwomanmake upatleast40percentof pledge wasaSpanishfirm–FesConsultingEmpresarial. and 2010, andthefirstcompanytosignEuropeanUnion’s companies’ boardsincreasedbytwo-thirdsbetween2008 womenonlargeSpanish numberof fect onattitudes. The have atleast40percentwomenandmen. licly tradedcompanieswithmorethan250employeesareto allpub- to takefullforceuntil2015; atthat time,theboardsof as tointroducequotasintolegislation.Spain’s ruleisnotdue imposingquotas.of SpainandFrancehavebothgoneso far progress, thembegantotoywiththeidea moreandof they said.Butnow, itisacceptedasthewaythingsare.” Oslo. “At doweneedthis?’ ‘Why peoplewereoutraged. first, theInstituteforSocialResearchin Vibeke Heidenreichof when itwasintroduced.“Itlikethesmokingban,”said 40percentruleappliestobothgenders.) (The took effect. pany actuallyhadtofindanextramaledirectorwhenthelaw Europe.Onecom- genderequalitythanthoseintherestof of Norwegian companieswerealreadyfurtheralongtheroad on publiccommittees;thattargetwasreachedin1997. So allplaces was setforwomentotakeupatleast40percentof inet ministerswerewomen,andaslongago1985atarget thecountry’scab- of theannouncementwasmade,half When of all publicly traded companies in Norway are women. being closed down. Today, more than 40 percent of the boards failed to do so faced having to pay a fine or (in extreme cases) gave firms a further two years to come into line.Those that ment stepped in and passed legislation (in January 2006) that many of them failed to reach the target in time, the govern- had at least 40 percent representation on their boards. When publicly traded companies three years to ensure that each sex (male) minister of trade and industry, Ansgar Gabrielsen, gave company boards. That nation took a bold step in 2002 when its trail blazed by Norway in imposing quotas for women on So far, European countries have been reluctant to follow the A questionofquotas soon betimetotake“asledgehammertheglassceiling.” itmay the EuropeanUnion.AsCommissionerRedingputit, sounding alinesimilartothatbeingtakenbyGermanyand business-led approachdoesnotachievesignificantchange,” therecommended introduce moreprescriptivealternativesif governmentmustreservetherightto tas. Buthedidsay, “The Earlier thisyear, theFrenchNational Assemblypassed thelegislationaloneseemstohavehadanef- Passage of As othernationscametoconfronttheirslowratesof But eveninNorway thelegislationwascontroversial Norway wasalikelyvenueforsuchanexperiment. The Korn/ f erry i e T u T i nsT

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Briefings onTalen T Credit backward of thelargeEuropeaneconomies inthisregard,the backward of nies didnothaveasinglewoman director. InItaly, themost Europe’s everyfiveof more thanoneoutof largestcompa- tune 500companiesareoccupied bywomen.Andin2010, States, For- theboardseatsof bycomparison, 15percentof 8 percentin2004. Europe’stors of top300companieswerewomen,arisefrom pact ontheoverallpicture.In2010, thedirec- 11.7percentof rope, suggestthatthesedevelopmentsarehavingsomeim- executivewomenfromacrossEu- clubof ), a2,500-member Women’sfessional Network (http://www.europeanpwn.net their directorsmustbewomen. ferent targetfornonlistedcompanies. By2019, 40percentof Yet, thereisnoroomforcomplacency. IntheUnited theEuropeanPro- latestfiguresfromtheE.P.W.N., The &l eadership be a time not far off, she suggested, when 40 percent of the be atimenotfaroff,shesuggested, when40percentof for gender, “then ethnicityandagewillbenext.” will There Ham Unitedfootballclub, quotasareimposed arguesthatif West the broadcaster inBritainandthevice chairwomanof ”would becounterproductive.” KarenBrady, awell-known quotas,”out advocatingtheimpositionof which,sheadded, strikes therightbalanceinsettingpracticalguidelineswith- Resources Practice,saidthattheDaviesreview“thankfully Mann’sWhitehead EMEAHuman Korn/Ferry Nixon, headof available. Itisnotjustmenwhoraisesucharguments. Lynne womentopostswhentheremaybebetterqualifiedmen of quire positivediscrimination theargumentsagainstthem.Forstarters,of theymight re- itslargecompaniesaremenonly. of morethanhalf boards of The growing popularity of quotashasnotsilencedsome growingpopularityof The — namely, theappointment Q4.2011 27 28 Q4.2011 to the boards of publicbodies to theboardsof quotas aretobeapplied,thentheyshouldappliedequally tures bybecomingprivate. wegian companies. Somefirmsmayhaveavoided thestric- are,ontheotherhand,morethan160,000 privateNor- There are only214companieslistedontheOsloStockExchange. meet theirrequirementsintime? InNorway, there arefines todocompanies thatdonot What over theirenforcement. Britain,arewhite men. rates forthewholeof land’s keyMonetaryPolicyCommittee, whichsetsinterest banks anduniversities.Eng- theBankof Allthemembersof publicly tradedcompanies, arelativelysmallnumber way, forinstance,therule applies onlytostate-ownedand 40. boardswillhavetobeundertheageof members of Why stop at public companies? Some have argued that if stopatpubliccompanies?Somehavearguedthatif Why A moreinsidiousproblemwith quotas, however, arises Moreover, quotascanleadtomarketdistortions. InNor- — organizations likecentral — there around theworld. goes, genderequality willblossomnaturallyinboardrooms age-old prejudiceshavebeenbroken down,thisargument Others arguethatquotasneed to beonlytemporary. Once to arguethat“likedemocracy, theyaretheleastbadoption.” saidthat“quotasdent, work.” author, The awoman,wenton porters. ArecentarticleinaBritishnewspaper, Indepen- The they failtocomplywiththelaw. compel companiestosuspendallpaymentsdirectorsif taken aslightlydifferentapproachtosanctions. It saysitwill be givenprioritywhenseekingpubliccontracts. France has formal sanctions, butcompaniesthatattainthetargets will themselves beyondthisparticularlaw).InSpain,thereareno a delisting,sincebybecomingprivate,companiescanput beingcloseddown(whicheffectivelymeans and thethreatof Despite theirimperfections, quotashavesomefirm sup- The Korn/ f erry i e T u T i nsT

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Briefings onTalen T Credit determine) hasdivertedattention fromwhatmaymatter arerelativelyeasyto (which, fortradedcompaniesat least, To thecrudefocus onboardroomnumbers someextent, The executiveissue investors. ness.” Lord Davies’s the“critical reportalsospokeof role” of versity intheirleadershipteamwillbepositiveforbusi- “companies andinvestorsneedtobeconvincedthatmoredi- board withinthenext10 years. Korn/Ferry’sNixonsaidthat to establishparitybetweenmenandwomenonthebank’s aproposalseeking stance, only10 percentvotedinfavor of Canada,forin- shareholders’ meetingattheRoyalBankof guments forgenderdiversityintheboardroom.Atarecent In manyinstances, theystillseemtobeunconvinced byar- was atop10 itemontheircorporateagenda. companiesinEuropesaidthatgenderdiversity percent of to helpthegendergapathigherexecutivelevels. Only27 in recentyears.Yet thestudyfoundcompaniesdoinglittle its financialsuccess.”This percentagehasbeenrisingsteeply direct connectionbetweenacompany’sgenderdiversityand ecutives (bothmenandwomen)nowbelievethat“there isa published inOctober2010, seniorex- foundthatamajority of tune 500companiesbetween1996and2000. in topexecutivepositionsandfinancialperformanceforFor- and business.” Itfoundastrongcorrelationbetweenwomen ganization whoseaimistoexpand“opportunities forwomen anor- quoted studywasdoneintheUnitedStatesbyCatalyst, mostwidely to companieswhentheysitontheirboards. The nice. Itmakescompaniessaferandstronger.” see whatiscleartothem,said:“Itnotjustthatdiversity Blindness,” abookaboutpeople’s “Wilful inabilityto thor of thegroup.fer fromtheviewsof MargaretHeffernan,theau- against theirownbeliefsandcalculationsinordernottodif- disease knownas“group wherebyindividualsgo think,” that diversityisarecognizedcureforthehighlycontagious evidencethatitdoes.ing bodyof all,thereisthefact Firstof isagrow- apart fromthefactthatitisobviouslyunfair?There climb totheboardroom?Doesitmatterforsocietyasawhole, Are governmentsrighttobeconcernedaboutwomen’s slow The economicrationale Diversity isarecognizedcureforthehighlycontagiousdiseaseknown as “group whereby individualsgoagainsttheirownbeliefsand think,” The faultinsomecaseslieswithcorporateinvestors. The A morerecentstudybytheconsultingfirmMcKinsey, isalsoacademicevidencethatwomenaddvalue There calculations in order not to differ from the views of thegroup.calculations inordernottodifferfromtheviewsof &l eadership abroad. A number of possiblereasons arepositedforthis.abroad. Anumberof with a significant profit and loss responsibility, and experience includes, inparticular, This for aboardroomseat. experience which they can gain the sort of experience that is a sine qua non theworkforcebeforetheyreachalevelat dropping outof sense too, asitdoesintheboardroom. ating results. MorediversityintheC-suitemakes economic der diversityhadhigherreturnsonequityandoper- nies byMcKinseyin2007 found that thosewithgreatergen- executive levels. 89largelistedEuropeancompa- Astudyof boards thatwomenshouldbeencouragedtorisethetop this largely to a shortage of women suitably trained for the job. women, the value of the company dropped. They attributed when a board had a 10 percent increase in the number of quotas in Norway became compulsory, and they found that pened in the two-year transition period after 2006 when the Business at the University of Michigan studied what hap- fortunately, thathasnothappenedyet.” what weweretryingtospeedup” withthequotas. un- “But, is needed attheexecutivecommitteelevel.” Sheadded,“That sity inNorway, saidthat“realeconomicpower-sharingis panies. 18different ontheboardsof Norwegiancom- found herself time.Asaconsequence,onewoman relatively shortspaceof partly becausetheleapto40percenthadbeachievedina qualified womenforthesejobs. Demandoutstrippedsupply working. Andstill,companieshaddifficultyfindingsuitably “boardroomcompetencetraining”andnet- to joinacourseof volunteer companiesselecteduptothreewomanexecutives try ranaprogramfrom2002 to2006 inwhichtheCEOsof Norwegian Confederationof BusinessandIndus- quotas. The from whichsuitablyqualifieddirectorscanbechosen. women them, therewillalwaysbearelativelysmallpoolof femaleseniorexecutives.”significant percentageof Without members isstilllimited,withveryfewcompanieshavinga saidthat“thepotentialfemaleboard pipeline of E.P.W.N. The women risingtothetopexecutivelevelswithincorporations. more, butisfarlesseasilymeasurable:thesmallnumbersof One is the persistent failure in the Western worldfor One isthepersistentfailurein the problemisthatwomeninEurope,aselsewhere,are The But itcanbearguedthatisnotjusttogetthemonto Amy Dittmar and Kenneth Ahern of the Ross School of theCenterforCorporateDiver- Marit Hoel,directorof wasaproblemforNorway whenitfirstintroduced That Q4.2011 29 30 Q4.2011 physical tasks chores. the Andincaringforchildrentheytakeonmore of are betrayedbytheirpartnersthe momentthatbabiescome Equality,”the Illusionof RebeccaAsherclaimsthatwomen Inherbook“Shattered:Modern Motherhoodand lar point. the glassceiling.” sheargued,“makesthat, itallthemoreimpossibletobreak more thantwiceaslikelymentoworkonlypart-time.And Women havesomuchtodoathome,shesaid,thattheyare well asbytheircasualapproachtobanalhouseholdchores.” at workbymen,their“insatiablepredatoryinstinctsas ecutive, CorinneMaier, arguedthatwomen areheldback roughly translatesas“Good MorningIdleness”), aFrenchex- thefunthings,men domoreof likereadingandplaying. mini di gestione economica delle aziende e ad incarichi dall’incarico, con particolare riferimento all’esperienza in ter- prie capacità ed ottenere inoltre tutte le competenze richieste istratore, soddisfare i requisiti necessari ad assumere un ruolo di ammin- grandi imprese devono attuare programmi di formazione: per fondamentalmente molto maschilista. siva, visto che ad oggi, il sistema economico e politico è ancora senso, la spinta al cambiamento sembra tutt’altro che propul- nostante negli ultimi anni si sia registrata un’apertura in questo centuale di rappresentanti femminili nella politica italiana. No- donne, motivo per cui, ad esempio, rimane contenuta la per- sorta di riluttanza verso l’assegnazione di posizioni senior alle di carattere molto locale. Tradizionalmente si riscontra una tuale più bassa in tutta l’Europa occidentale. all’interno del proprio consiglio di amministrazione, la percen- Meno della metà delle aziende italiane ha almeno una donna amministratori delle principali aziende italiane sono donne. European Professional Women’s Network, meno del 4% degli senza maschile. Secondo un sondaggio condotto nel 2010 da bienti lavorativi maggiormente dominato in Europa dalla pre- Corporate Finance in Italia, a diretto contatto con uno degli am- nel settore dell’executive search, ha lavorato nell’ambito del Ferry. Prima di intraprendere una lunga e importante carriera Maurizia Villa è managing director della sede milanese di Korn/ Alla ricercadidonnedainserireneiCdA more thanmendoing“unpaidwork” hoursaday womenonaveragespendtwoandahalf ment, the OrganizationforEconomicCooperationandDevelop- husbands andwivestosharehouseholdtasksequally. Across More recently, aBritishexecutivemadenotdissimi- In abest-sellingbookcalled“BonjourParesse” (which Affinché un cambiamento possa esserci, sottolinea Villa, le Secondo Villa il mercato italiano è particolarmente rigido e le donne devono acquisire maggiore fiducia nelle pro- — like bathingandchangingdiapers — much of ithousehold much of — while trasmesso zione, solo due di queste hanno risposto comunicando di avere avevano nessuna donna all’interno del consiglio di amministra- trasmessi a grandi di aziende italiane, molte delle quali non mento in cui i profili delle donne incluse nella lista sono stati ludente. Ancora più deludente è stato constatare che nel mo- l’individuazione di soli 72 nominativi, un numero alquanto de- fiche per entrare a far parte di un CdA si è concluso con stilare una lista di 1.000 donne italiane che abbiano le quali- nel settore dell’executive search, tra cui anche Korn/Ferry, di bro di un consiglio di amministrazione. sione ampia e quell’istinto commerciale necessari ad un mem- Umane o nella direzione Legale difficilmente fornirà quella vi- al loro lavoro. Tuttavia, un’intera carriera nella direzione Risorse carriera potranno entrare o uscire in base alle esigenze esterne aziendali chiuse, in cui sanno che durante il corso della loro all’estero. Sono troppe le donne bloccate all’interno di unità almeno il 30% dal 2015. del genere meno rappresentato all’interno del Cda dal 2012 e legge che obbligherà le società quotate ad avere almeno il 20% cienza ottimale nonostante sia stata appena approvata una rimanere ancora per un po’ di tempo al di sotto dei livelli di effi- ferma. Il suo paese, l’Italia, sembra tuttavia intenzionato a glio d’amministrazione eterogeneo è anche più efficiente” af- numero di donne nei CdA è di carattere economico: “Un consi- them upforapositiononboard. jobsthatmightline otherwise beabletotakeonthesortof isatimewhenwomenwould sponsible forthemselves. This at atimewhentheirchildrenhavebecomemoreorlessre- of anysolution,themostimportantis probablyaccesstoflex- of manycorporate cultures)arepart that arestillattheheartof ties (womenareinvariablyexcluded fromtheoldboys’clubs themqualifiedforthejob? canbedonetomake more of What longer, togivethemtimebecomeready fortheboard? How arecompaniestokeepmorewomenintheworkforce How tokeepwomenworking parents (orin-laws) “default career.” Itisassumedthattheywilllookafterelderly parenting. the burdensof ing “crap part-timejobs.” Fathers, shesuggests, donotshare ents,” condemnedtobeingsidelinedprofessionallyandhav- on thescene.Mothers, shesays, turninto“foundation par- While mentoringprograms andnetworkingpossibili- While Women arealsoalmostuniversallyseenashavingthe Il recente tentativo da parte di un gruppo di aziende attive Secondo Villa la ragione principale per inserire un maggior il profilo al presidente dell’azienda. — a life-changingeventthatoftenoccurs The Korn/ f erry i e T u T i nsT

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Briefings onTalen T Credit the broad outlook and commercial instinct required of a full lifetime in H.R. or the legal department is unlikely to provide mands outside of work change throughout their career. But a where they know they will be able to go in and out as the de- ments overseas. Too the job position. They also need to be given the necessary skill sets for fidence about their ability to meet the requirements of a board put training programs in place. Women need to gain more con- chauvinist. ing, as the economic and political system is still very male more open attitude, the push for change seems not very driv- ample, are women. Although in recent years there has been a all kinds. A relatively low proportion of Italian politicians, for ex- There is traditional resistance to women in senior positions of Western Europe. and as colleagues? Without their support, progress willcon- Without theirsupport, and ascolleagues? mains, Howsupportive willtheybeashusbands, asfathers, keyquestion re- company boardsstilldependson men.The to betakenseriously. grams themselvesmatterlessthanthefactthattheyareseen pro- sity programsbytheCEOand/orexecutiveteam.The gender-diver- wasthevisiblemonitoringof ecutives. That seniorfemaleex- more stronglycorrelatedwithhighlevelsof “to retain,promoteanddevelopwomen.” recruit, ible workingconditionsoverthepreviousfiveyearsinorder companiesinEuropehadofferedflex- that only47percentof tious women.”Yet theOctober2010 McKinseystudyfound becominganattractiveemployerforableandambi- hope of companiesdonotprovideflexibility,that if they“haveno atShellInternational,wrote diversitystrategy mer headof Graham,afor- andJacey the Boardroom,”PeninahThomson ible workingconditions. Intheirbook“AWoman’s Is Place in even panies were women. Less than half of Italian companies have that fewer than 4 percent of the directors of large Italian com- 2010 by the European Professional Women’s Network found the most male-dominated workplaces in Europe. A survey in long and distinguished career in executive search. lan. She worked in corporate finance in Italy before beginning a Maurizia Villa is managing director of Korn/Ferry’s office in Mi- Finding Women For Boards one female director, the lowest proportion in the whole of At the end of theday,At theendof womenon though,thefutureof McKinsey’s analysisfoundthattherewasafactoreven To Villa says that the Italian market is very rigid and very local. Maurizia Villa has close-up first-hand experience in one of bring about change, Villa says, big companies need to — in particular, profit and loss experience and assign- many women stick to corporate silos, &l eadership 2012 and at least 30% from 2015. less represented gender within the Board of Directors as from law that forces listed companies to have at least 20% of the to come even though the Italian Parliament has just approved a mined to operate at less than optimal efficiency for some time board,” she said. Her home country, however, seems deter- on boards is economic. “A the profiles to their chairman. only two companies responded, saying that they had forwarded large Italian companies, many of which had no female director, files of the women on the list were circulated to a number of number. Even more disappointing was the fact that when pro- with no more than 72 names. It was a disappointingly low who are qualified for a seat on a board managed to come up cluding board director. Villa argues that the best reason for bringing more women A recent attempt by a group of executive search firms (in- Korn/Ferry) to compile a list of 1,000 women in Italy varied board is a more efficient Q4.2011 31 32 Q4.2011 to getintopositionswheretheynolongerneedthatsupport. tinue tobeglaciallyslow, anditwilltakedecadesforwomen interesting... Source: TheNewYork Times likelier todiethansomeonewhositsless3. of yourleisuretimesittingmakesyouupto40% Exercise ornot,spending6morehoursaday TAKE ASTAND The Korn/ f erry i e T u T i nsT

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, Q4.2011 Q4.2011 33 W 34 ket-driven science.” began championingwhatshecalls“mar- chairman laterthatyear,chairman laterthatyear, sheimmediately sheimmediately conversation. followsisdrawnfrom that What Wilmington, Del. ters in Kurtzman,atDuPont’sin chief,Joel corporateheadquar- Talkington andJimAslaksen,withtheBriefings editor pany, Kullmanspokewith theKorn/FerrypartnersAndy making DuPontamoreinnovative,science-drivencom- theearth’sof growingpopulation.To explain howsheis areallbuiltonfocusingsciencetheneeds mon. They help turncrops, likeswitchgrass, into energy. materials forelectroniccomponents, andenzymes that new andinnovativemarketslikesolarenergy, enabling continue togrow. DuPontisalso aformidableplayerin tritional products, foodandhealth-relatedproducts will ing thatwithagrowingpopulation,themarketfornu- lated productsandenzymes, isbasedontheunderstand- Danisco, nutritionandhealth-re- aDanishproducerof company’srecent$6billionacquisitionof the world.The that morecloselytrackwiththebigtrends(andneeds)of hind agriculture,thecompany’slargestsegment. revenue,wellbe- ness accountsonlyabout20 percentof with justunder$34billioninrevenue,thechemicalsbusi- terials, andmanyotherbusinessareas. Intoday’sDuPont, culture, nutrition,health,biotechnology, engineeredma- activitiesthatnowincludesagri- much largerportfolioof ical producer, overthelastcentury, tosomethingwitha gunpowder,manufacturer of twocenturiesago, toachem- sheiscontinuingthecompany’sevolutionfroma ing that, theworld’sgrowthmarkets.them ontheneedsof Bydo- pabilities, alongwithitspowertoinnovate,andfocus Q4.2011 All of thesechangeshaveatleastoneelementincom- All of Kullman hasbeenpushingDuPontintonewareas ideaistouseDuPont’s formidableresearchca- The January 2009 2009 andits andits January January chief executivein chief became DuPont’s 19th hen EllenKullman our company. To me,thesechallengesrepresenthugeopportunitiesfor we’llhavetodoabetterjobthanwearedoingnow.planet, usonthe billionof thereareanothercoupleof well, andif Today,and theenvironment. wedon’t dothesethingsvery alsogoingtohaveprotectpeople We’re and transport. ing toneedhavewater, topurify whichrequiresenergy arealsogo- living.They cation andtheirgeneralwayof to want access to energy to wantaccessenergy billion morepeopleby2050. peoplearealsogoing These lion by2050. goingtohavefeedtwo meanswe’re That billion peopleintheworldnowandweexpectninebil- themisthatwehaveseven things thatareclearandoneof the world’sactuallygoingtoendup, buttherearealotof affect yourbusiness. Now, wedon’t understandwhere stand thetrendsthatarefacingworldandhowthey shareholders andcreatereturns, thenyouhavetounder- acompanyneedstogrowinordersatisfy Kuhlman: If trends toyourbusiness.Howdoesthatlinkwork? changes andchallengeseveryonefaces.You tiedthose in whichyoudiscussedtheworld’smegatrends You recentlygaveaspeechattheDetroitEconomicClub — fortransportation,communi- The Korn/ f erry i

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Briefings onTalen T Credit our shareholders. cult issues, wewillalsobecreatinggrowthandreturnsfor humanity’smostdiffi- will webehelpingtosolvesomeof thoseareas,successful,notonly can helpineachof we’re if long-term growth.And,becausewehavethesciencethat trends isaboutsustainability, butitisalsoaboutcreating people.So,changes involvebillionsof followingthemega- long termandnotcyclicalorshort-termchanges. These ate opportunitiesforgrowthourcompany. are These are therealneedsworldhas, andtheseneedswillcre- ing toputourresearch-and-developmentdollars. These go- is morethaninterestingbecausethiswherewe’re ing, butwhyarewetalkingaboutthem?AndIsaid,This employees said,well,thosebigtrendsareallveryinterest- wefirststartedtalkingaboutthis,Kullman:When our around sustainability? You’re talkingaboutfocusingDuPont’sresources &l eadership we think alternative energy is a key part of that isakeypartof we thinkalternativeenergy and Brazil, and we’re focusingresourcesthere. and Brazil,we’re search centersaroundtheglobe,includingIndia,China32 We havere- doing. whichiswhatwe’re pared forthat, that’s wherethepopulationgrowthis.Wehavetobepre- future demand,willoccurindevelopingcountries, since futureeconomicgrowth,aswell a verylargeshareof We alsobelievethat tecting peopleandtheenvironment. to bedoing. our67,000 whatweneedallof really excited.That’s people It’sbecause wedictatedit. becauseourpeoplearegetting trends. Itwasahugenumber,wasn’t That over85percent. ourcapitalexpenditureswerefocusedonthesemega- of ourresearchanddevelopmenthowmuch much of tion reviewslastyear, whichareourtacticalreviews, how Kullman: Iwaspleasedaswecamethroughourexecu- dress thelarge-scaletrendsyoujustmentioned? Are peopleonboardwiththeideaofusingsciencetoad- trends includefeedingtheworld,accesstoenergy Kullman: It’s alldrivenbypopulationgrowth,butthe What aretheothermegatrendsyoulookingat? Q4.2011 — and pro- — and 35 36 terials scienceandothers, tocreatenewopportunities. chemistry,us tobeintegratingthesciencesof biology, ma- novation atDuPontissciencebased,thenit’s naturalfor changed overthelast30years, yourviewisthatin- andif theday.science of has youthinkhowmuchbiology Butif sis derstand theirmarketsand competitionbetter. stand whattheyhavetodobe successful,andtheyun- forthecompany,egy thenallelsefollows. Peopleunder- you createaclearstrat- When clarity onwhatthegoalsare. run processestoallocatethoseresourcessothatweget sources wegivethemtocreaterealvalue.Andhave businesseswhocanallocatethere- idents inchargeof portfolio of productsithad portfolio of ural evolution.It’s followingthescience.DuPontgot level Kullman:We needtounderstandcustomersatthelocal Why regional? respond morerapidlytotheenvironment. cial crisistotakealookatourselvesandadjustsowecould sure theywereclosertothecustomers.Weusedfinan- leadership.We alsoregionalizedthebusinessestomake ated 13businesses, 22, andwetookoutalayerof insteadof from thatexercisewastosimplifythecompany.We cre- tunity totakealookatourselves. theconclusions Oneof global financialcrisiswastousetheasanoppor- Kullman: the thethingswedidcomingoutof Oneof How doesthatworkinpractice? thesecorevalues. thestrength of of you buildoff ple. Then, stewardship, highestethicalbehaviorandrespectforpeo- safetyandhealth,environmental with ourcorevaluesof have to know what’s really important about it. For us, it starts Kuhlman: To change culture, you first have to honor it. You change? Does pursuinginnovationsointenselyrequireaculture chemistry Backthen,itwas search inawaythatpiquedmyinterest. science.Itdidbasicre- itsemphasis ontheutilizationof of that DuPontwasdifferentfromothercompaniesbecause Istartedatthiscompany22 yearsago,When itwasclear thecompany.seems morelikethenaturalevolutionof it time.Infact, ally beenoccurringoveralongperiodof Kullman: It’s becauseit’s actuallynotsuchabigshift, re- ing aboutit? big shiftfora209-year-oldcompany?Howareyougo- around innovationthroughscience.Isn’tthatapretty Since becomingCEO, youhavefocusedthecompany Q4.2011 — andothertechniques. Today, it’s biology. anat- That’s — what their challenges are. We needtohavepres- whattheirchallengesare. — breakingdownhydrocarbonswithcataly- — nylon,Kevlar® — usingthe people do that, it’speople dothat, verypowerful. When they aresuccessful,thenthecompanyissuccessful. for thecompany.” Itwastohavepeopleunderstand thatif theminawaythatsays“whatIdomakesdifference of directives. Itwastohaveeveryoneconnectoneortwo person inthecompanyseethemselvesrelationtothese regarding whattheyhadtodo. Mygoalwastohaveevery hance ourresearch-and-developmentefforts. tain theoperatingleverageandrevenuegrowthtoen- for ourcompany. In2011, itisabout continuingtomain- newproductsintroducedcomparedtoanyotheryear of product introductions In2010,our researchanddevelopment. itwasabout new productivity andcash,thoughweneversloweddown objectives changeeveryyear.ful. These In2009, itwas objectives,set of wemetthem,we’dbesuccess- which,if It didfine.)So, havingaveryclear wegotintoamodeof culture. (Agriculturedidn’t haveaglobalfinancialcrisis. kets wereinfreefall.Itaffectedeverythingexceptagri- to besuccessful.Itwasaveryscaryyearbecausethemar- directivesaboutwhatwehadtogetdone set aseriesof sis, wefocusedonthetacticallevel.Goinginto2009, we thefinancialcri- other isthestrategiclevel.Comingoutof which is“whatdoIhavetogetdonethismonth.” The Kullman: aretwolevels. Oneisthetacticallevel, There that? You saidsimplifyingandclarity. Whatdoyoumeanby As a result of thesedirectives,As aresultof peoplewereveryclear — andwehadarecordnumber The Korn/ f erry i e T u T i nsT

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Briefings onTalen T Credit in customersandweshare.Asayoungmarketer, Ire- where webroughtourresearcherstogether. Now webring we callTech Con,whichusedtobejustaninternalevent and others. workingjointlywithcustomers point isthatitawayof tomotive companyoraChinesesolarpanelcompany. The very differentfromhowyouengagewithanAmericanau- scope. HowyouengagewithaBrazilianfoodcompanyis our plied differentlythroughoutthecompanybecauseof it up!It’s inclusiveinnovation.Butit’s anelementof ap- Kullman: it’sWedidn’t First, make actuallyarealword. collaboratory. Whatisthat? I understandyou’vedevelopedsomethingcalledaglobal Kevlar® sotheycangettheresultsneed. them, wecan’t reallyunderstandhowweshouldchange less wegointotheirplantsiteswiththemandwork ently toberightfortheirmanufacturingsystems. Butun- can tellustheyneedKevlar®tobeprocessedalittlediffer- opening thedoorsalittlewider. Forexample,customers ernments, course,ourownpeople.Itmeans NGOsandof only ourcustomersintheinnovationprocess, butgov- We usethesewordstoincludenot inclusive innovation. are Kullman: They We havesomewordsthatrelatetoit. What doyoumeanbylookingexternally? customers inthedecadestocome. began askingourselveshowwecanstayrelevanttoour We more broadlyandaskingourselveshowwerelatetoit. externally. Itwaswhenwestartedlookingattheworld waswhenwebeganlooking headed asacompany?That Where weare ing thefinancialcrisisweaskedourselves, welookedatthestrategicleveldur- Kullman:When And whataboutthestrategiclevel? Let me give you an example. We haveanannualevent Let megiveyouanexample. &l eadership marketers products andservicestomeetourcustomers’needs. we find new and different opportunities to partner around howwelearnaboutcollaborating.And,asdoit, That’s 300 or400peopletogetexposuredifferentindustries. evance to what I was doing. I’d get all kinds of ideas getallkindsof evance towhatIwasdoing.I’d applications theywereworkingontoseehowithadrel- all thefascinatingthingsthatwerebeingdoneand notesaftertalkingtothescientistsabout made allkindsof member goingaroundTech paper, Conwithapadof andI because they want to understand where we’re goingand because theywanttounderstandwherewe’re side thecompany. Peoplewatchandlistenverycarefully in townmeetings. communicatingout- Ialsodoalotof communicatinginlargegroups,lot of insmallgroups, Idoa thateverymorning!First, Kuhlman: Iaskmyself tion likethat? innovative. Whatistheroleofleaderinanorganiza- Let’s talkaboutleadinganorganizationthataimstobe nies weinvitedtalktoourpeople in theevenings, wegettogetherandhaveallthecompa- interactionbefore.Later,never experiencedthistypeof buthewasreallyexcitedaboutitandsaidhe’swork out, we couldworktogether. Now, theseideaswill notallof that daytheycameupwithcloseto100 ideasabouthow a foodcompanyinBrazil,tellingmethatattheirsession ence cando. ourcustomers, Irememberoneof theheadof talk togetheraboutwhattheirissuesareandoursci- ments, andputteamstogetherinroomshavethem bring infourorfivecustomersdifferentmarketseg- began bringingincustomersonthefirstday. Wemight company. yearsagoweopeneditupand Butacoupleof which wasonereasonwesharedthescienceacross — aboutwhattheirneedsare.Doingthisallows — ourresearchers, our Q4.2011 —

37 38 and gettinghigher. Butwestillhaveto improve. last decades, whichiswhyournumberhigh this.” innovationhaschangedoverthe Sothepaceof need to doitandbecausethecustomersaresaying,“We two newversionsayearbecausethescienceisallowingus new versioneverythreeyears. Now, weareintroducing It isusedinproducingsolarcells.Wetointroducea turns up. Andwecertainly understandthereturnsonany applications. So, theyneedtodothingsthatkeeptheirre- productsandtheymanage theirmarketsand portfolios of on thebusinessesbecause,after all,theymanagetheir it’shave toaskif Sowelookatabsolutereturns relevant. acompanylikeoursyou when youtakeabroaderviewof Kullman:You canunderstanditonagranularbasis, but innovation? Are therereturnonequitymodelsorcapitalfor first companytolookatreturnsonequityandcapital. in the1920s.Backthen,itwasprobably DuPont inventedthemodernbusinessmodel changed howwe’ve you anexampleof Kullman: give Maybe.Butwestillhavetoimprove.I’ll lent showing. Compared withmanyothercompanies,that’sanexcel- ter atit. hittingournumbers,years.We’re butwehavetogetbet- revenue camefromproductsintroducedinthelastfour ter wechangedittofouryears, our wefound31percentof Lastyear,because wewantedtogetupthecurvefast. af- atlessthanfouryearsold, five yearsold,andnowwe’re from newproducts.Westartedwithproductslessthan revenue We usethepercentof rics thatreallygetatthat. officeristryingtocomeupwithmet- technology chief on yourinnovation?Measuringthatistheholygrail.Our Kullman:Yes. bigquestionishowdoyougetareturn The innovation? Are therespecificmetricsthatyouusearound ought todoitbetter. getsactivitygoing,too. That something thatIdon’t thinkwedosogreatandI it workforthem.Ialsosometimesgetupandsay, thisis our otherbusinessesthentryandfigureouthowtomake youwouldn’t Idothat, believehowmanyof When cate it. thing thatwedoreallywellandIthinkshouldrepli- willingtogetupandsay, So,talked about. I’m here’s some- it’sif goodenoughtobedone,it’s goodenoughtobe means That accountability fromaleadershipstandpoint. going sowell.Now, abigbelieverintransparencyand I’m the personwhoholdsupmirrorwhenthingsaren’t cheerleaderaswell achief tive organizationiskindof So,how theycanparticipateinit. aninnova- theleaderof Q4.2011 — metalizedpaste. —

to keepitbusinesscentered. turn-on-innovation pictureyougetinto. whywetry That’s complicatesanyre- the productsthatdon’t panout?That Butwhatdoyouwiththecostsof given newproduct. balance. As a result, even if wemakenootherchangesin evenif balance. Asaresult, leader inenzymesandnutritionhealth,changesthe Danisco,the longhaul.Ourrecentacquisitionof againa company looklike? What doesthe we projectoutfiveyears, 10 years, andask, makes senseandwhereisitallleadingus. And,that’s why and whywelookatitintheaggregateaskwhat whywelookatitbusinessby That’s standpoint. we runfromastrategicstandpointandanexecution Kullman: whyweruntheprocessesthat course.That’s Of the companyisheaded. sources andthattakessomeunderstandingofwhere But youalsohavetoallocatecapitalandhumanre- cial crisis, forexample. don’t know.We didn’t knowtherewouldbeaglobalfinan- looking farintothefutureisthatyoudon’t knowwhatyou success iswhatleadsus,problemwith If that’s The great. successfulwithourscienceandinnovation. where we’re company isgoingtolookmoreandlikethoseareas Kullman: Ibelievethatformfollowsfunctionandthe what DuPontwilllooklikeinfuturedecades? Aside frombeinganinnovator, doyouhaveapictureof But someactionscanhaveverybigimpactsover The Korn/ f erry i e T u T i nsT

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Briefings onTalen T Credit scribed. a highervalueandthatalignwiththemegatrendsIde- the companytoareaswherewethinksciencehas cus of we hired about 10 or 12 people out of thegraduatingclass,we hiredabout10 or12peopleoutof the commencementaddressatLehighUniversity, where workingon.Irecentlygave we’re reallylikethestuff They ing, youreallyseethattheywanttochangetheworld. say, hir- outwithyoungpeople,whenyou’re whenyou’re ButIhaveto Western EuropeandtheU.S. than wearein Kullman: muchyoungerinLatinAmericaandAsia We’re Is thatsamedemographictransitiongoingonglobally? informationthatwecan’thave hugeamountsof lose. have tobemindfulthatthepeoplewhowillretiring givesusanopportunitytoaddnewskills. Butwealso That willbeturningover. ourworkforceintheU.S. share of anycountryinwhichweoperate.Soalarge the highestof average ageintheUnitedStatesismid-50s. That’s ness who, inthenextfiveyearsorso, willberetiring.Our babyboomersinthebusi- esting isthattherearealotof thebusinessisgrowing.Inaddition,what’sside of inter- Kuhlman: Agronomists, agriculture that’s forsure.The Will youhavetobringinpeoplewithnewkindsofskills? What doesthatmeanintermsofyourhumancapital? mance side technology, advancedmaterials, thanweareontheperfor- earnings-wise, innutritionaswellagriculture,bio- the next10 years, wewillbemuchmoreheavilyinvolved, — chemicals. So, reallychangingthefo- we’re &l eadership on ourIndiateamcomesin.Iknowwhattheconditions important becausethenIcanunderstandwhensomeone these areas. Sogettingoutandseeingwhat’s goingonis weneedtobeequallysuccessfulin agriculture. Andyet, very differentfrom North America,whereit’s production areasare inbigcans.tiny littlepackagesinsteadof These to seehowourinsecticidesarebeingsold,forexample,in have totalkthefarmersthemselves. Ithinkyouhave andittakestime,butit’sing todothat, important. about whattheneedsareinIndia.It’s logisticallychalleng- ference roominahotelorofficebuildingDelhitalking inacon- you’re with atotallydifferentperspectivethanif youcomeback When youdothat, went outintothefields. spent timewithfarmers, individuallyandingroups. Ialso which isabigagriculturalarea.Iwentintovillagesand search center, IwentuptoAmritsar, inthePunjabregion, bai, Delhi,orevenHyderabad,wherewehaveamajorre- thestandardvisitstoMum- just inIndiaandinsteadof isgoingon.Iwas in agriculture,forexample,therealstuff ies andgoingintothesmallercitiesruralareaswhere, organizations. Butit’s thebigcit- alsoaboutgettingoutof get outandyouhavetointeractwithyourpeersatvarious Kullman: It’s easytogetisolatedinthejob. So, youhaveto make certainyoucontinuetolearn? How doyoukeepintunewiththeorganizationand ing sciencetosolvethebigissuesImentioned. to workonthingsthatwillmakeadifference,whichisus- “Wow, doingisreallycool,”becausetheywant whatyou’re weresaying, work theyweregoingtobedoing.They of werereallyexcitedaboutthekind mostly engineers. They You alsohavetotalkyourchannelpartners;you Q4.2011 39 40 the rightplacesoIcouldunderstandchallenges. inthefieldtogetmyknowledgelevel immerse myself hand experiencewhenIbecameCEO. Ihadto Asaresult, timeearlierinmycareerandIhadnofirst- spend alotof Agriculture,forexample,wasanareawhereIdidn’tterest. articles andmagazines, in- sometimesbooksinanareaof includes thetopsevenpeopleincompany. It’s theCFO, executive,which Kullman:of thechief We runanoffice that fromhappeninginsidetheorganization? You saidit’seasytogetisolated.Howdoyouprevent Ialsoread really are.Inadditiontogettingout, Q4.2011 — mostly the right decisions. When that happens,the rightdecisions.When it’s powerful. you’ll gettotherightquestions andtherightissues and dialogueyouhavewiththe teams, themorelikely moreengagement The going andhelpcreateengagement. what Ididn’t seegettingdone. AndItalkaboutwhatsawgettingdoneand talk aboutit. ferent andIdon’t understandwhythat’s the case.” Sowe change. Ilikedhowmyjobwasbefore,andnowit’s dif- not shy. say:“Idon’t understandwhyyoumade this They’ll canalsobequitebluntaboutthings. too.it, They’re They going as a company.where we’re It helps them understand logue andIfindithelpsmereinforcethemessageabout And Ialsohavequestionsforthem.So, wegetinto adia- anyone’s boss. Igetgreatinsightfromthesemeetings. bounds andnothingthat’s goingtobereportedback we neverendearly. noquestionsthatareoutof There’re and fifteenminutesisallaboutaskingmequestions. And takingthecompany.where we’re thenexthour Then, nizational, andsoon.Forthefirst15minutes, Italkabout We dodifferentcuts meeting twoorthreetimesamonthwith10 to12people. our decisionmaking. sues onthetablefaster. AndIthinkthat’s helpeduswith helped uscreateabetterdialogueandwaystogetis- CEO throughtheseprocesses, includingme.Ithinkithas of the around somemind-sets.Weputtheentireoffice behaviorsand trainedourselvesaroundasetof So we’ve idated ordon’t likesomethingelseintheenvironment. peoplefeelintim- then you’llgetalotmoredonethanif feel theycanbringtheirwholeselvestothetablehelp, youcreateanenvironmentwherepeople premise isthatif thatprocessiscalled“mind-setment of behaviors.” of The duction systemandweruntheminouroffice.Oneseg- lized behaviorprocessesthatwestartedusinginourpro- evenuti- We’ve gottenalotbetterat. process thatwe’ve dering whytheelephantissittingincorner. a That’s to discusstheelephantinroomasopposedwon- why. wegeteverybody Ithinkwemakebetterdecisionsif But Ireallyandtrulyneedtoknowwheretheyare tellthem.Idon’t playgames. I’ll where Iamonasubject, someonewantstoknow course,if not alwaysweighin.Of tositbackandlisten spective, Ihavetaughtmyself entire company, notjustyourarea.Frommyownper- an enterprisethinker. Assuch,youhavetothinkforthe role intheorganization,butthisoffice,youhavetobe as CEObysayingtothegroup, youhasyour thateachof presidents whorunthebusinesses, andme.Istartedout humanresources,head of legal,thethreeexecutivevice There are a lot of thingsyoucandotogetadialogue arealotof There Another thingIdotostayintouchishaveasmall — middle management, crossorga- middlemanagement, The Korn/ f erry i e T u T i nsT

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Briefings onTalen T James Turner T &l Twitter, appsforsmart- LinkedIn,blogging,textingandwave uponwaveof phones, socialmediahasquicklymorphedfrom ayouth-orientedcuriosity more thanBarackObama’s is successful2008 presidentialcampaign.There impact onsocietyingeneralandbusinessparticular hasbeenremark- able. Fueled by the steadily increasing popularity of Facebook, YouTube, Facebook, able. Fueledbythesteadilyincreasingpopularityof to acorporateimperative. he social media phenomenon is still shy of its10th anniversary, hesocialmediaphenomenonisstillshyof butits eadership Perhaps nothing demonstrated the power and scope of socialmedia Perhaps nothingdemonstrated thepowerandscopeof Rifkin_social_media_5-20-cm.doc Facebook Selling Stuff With BY glennrifkin Q4.2011 41 42 Q4.2011 year old Chris Hughes, a co-founder of Facebook, reported Facebook, of co-founder a Hughes, Chris old year many of whom had worked for Howard Dean in 2004, was 2004, in Dean Howard for worked had whom of many as an essential weapon in the campaign. The online team, online The campaign. the in weapon essential an as of outcome the in and fundraising in difference nificant me- social of incorporation deft Obama’s that argument no brought together early. The head of social media, then-24- media, social of head early.The together brought the election. His team was prescient enough to integrate to enough prescient was team His election. the directly to Obama’s campaign manager, and social media social and manager, campaign Obama’s to directly dia and the Internet into his campaign efforts made a sig- a made efforts campaign his into Internet the and dia online activities from the outset, not just as an add-on but add-on an as just not outset, the from activities online “There’s beentherealization‘Oh mygod,wehave todosome- “There’s “Eighty percent of companies have some kind of socialmedia companieshavesomekindof “Eighty percentof 70,000 fundraisinghubsraised$30million. Internet and social media. The resultinglandslidevictoryfor Internet andsocialmedia.The How dowegetstartedwithsomethingthatwillhaveaposi- monthly visitors, andtherewere400,000 blogpoststhatre- for social media? Will ithaveapositiveimpactmybrand? for socialmedia? a socialmediaconsultantandauthorinFramingham,Mass. and mostpunditsbelievehewouldnothavewonwithoutthe ated videos. The 14.5 million hours of free air time was the volunteer groupsthatheld200,000 offlineevents. Morethan was integrated acrosstheentireorganization. was presence, butprobablyonly20 percentaredoingitwell.” ployees, isdoingsomethinginsocialmedia,”saidPaulGillin, mediareportingabouthisbrilliant awaveof Obama setoff program, and each received five to 20 texts per month. thing aboutthisbecauseit’s notgoingaway.’ Andsomost tive impact? These arequestionsthatstillbeingasked,ac- tive impact?These tion to sit up and take notice of the power of thesenewtools. thepowerof tion tositupandtakenoticeof than 14.5 million hours, plus more than 440,000 user-gener- times. have alwaysmovedslowlyinembracingnewtrends, espe- use of socialmedia.And,italsoforcedeverymajorcorpora- use of cording toGillin. cially in the technology era. What isthereturnoninvestment What era. cially inthetechnology ceived 7000variations of more than 1 billion emails. equivalent of nearly $50 million in paid television advertising. eos that were viewed more than 80 million times for more sulted in 2 million profiles. The sitehelpedgenerate35,000 sulted in2millionprofiles. “We’re inthe‘haironfire’stagerightnow,”“We’re hesaid. “Almost anysize,sayover1000 em- everycorporationof • • • • • • The resultswerestaggering: The Other thantheusualearlyadopters, mostorganizations Obama won 70 percent of theunder-25yearoldvote, Obama won70percentof Three Three million people signed up for the text messaging There were nearly 2,000 official campaign YouTube vid- milliononline donorscontributed6.5 million Three 13millionpeoplewhore- emaillistconsisted of The Web sitedrew8.5million MyBarackObama.com The Obama had more than three million friends on Facebook. The Korn/ f erry i e T u T i nsT

James Turner Briefings onTalen T The New York Times,ElinorSteele,Tupperware’s New vicepresident The Tupperware “parties,” thiseffortisbuiltonGillin’s conceptof The “Chain Confidence”The of campaign,basedonauniqueFace- you and you want to have a relationship with them,” he said. relationship buildingwithatrustedbrand.Inanarticlein Brands Corporationannouncedafull-blownsocialmediaef- relationship with people who want to have a relationship with motivational tipsfromcelebritiessuchassingerKellyClark- make themawarethatTupperwarenolongersellsjustfood ‘Let’sment andhanditoverthereasthewaytodoit. hire for globalcommunicationsandpublicrelations, explained fort intendedtocarryitsvauntedbrandintothe21stcentury. and setupablogaspressreleasechannel.’ Frommyper- new generation of womentotheTupperwarebrandand new generationof isvantage aboutthat “This engagingsocial inmedia a offers. prowess, womenhavinghostedin-home withgenerationsof brand’s Facebookpage,includingvideoclips, blogpostsand book page and Twitter account, isintendedtointroducea book pageandTwitteraccount, that Tupperware had been dabbling at the edges of socialme- that Tupperwarehadbeendabblingattheedgesof to “push out a message” is missing the potent competitive ad- helping peoplebecomebrandadvocates,” dia but“now, gettingseriousaboutit.” we’re Shesaid thatthe dia. Hereareseveralstandouts: The Times. Steele toldThe community anddestination” forTupperwaresellersandbuy- themarketingdepart- companies consideritanextensionof campaigns everyday. InMay, 2011, forexample,Tupperware companies thathavealreadyestablished ers. “It’s aboutmovingfrombrandawarenessto son. GiventhatTupperwareislegendaryforitsdirectselling social mediacampaignisintendedtobecome“aninteractive style products. storage containersbutalsocookware,cutleryandotherlife- spective, thisisn’t agoodwaytodoit.” collegetohandleTwitteraccountsforus some kidsoutof successful trackrecordsusingsocialme- And there are many examples of And therearemanyexamplesof In fact, Gillin said, using social media as just another way The campaign features all manner of contentonthe campaignfeaturesallmannerof The Companies areemergingwithnew, viablesocialmedia &l eadership W Alan Mulally’s vision for the company. Monty, who had established himself as a social media expert In 2010, itsvast market- Fordspentmorethan25percentof Boeing andtookoverFordin2006, hemadeitclearthathis mission wasto create a united Ford focused intently on prof- mosphere far more akin to a high-tech startup where people forms, including Facebook, Twitter,forms, includingFacebook, YouTubeandFlickr. Ac- itable growth. The OneFordplanbecamethecorporateman- itable growth.The icant andpotentnewmarketingchannelforFord,the ing budgetonsocialmedia.Socialmediahasbecomeasignif- were jazzed up about the quality of the products and new CEO and widely read blogger, readied himself for serious culture not intendedtoreplaceFord’straditionalmarketingefforts. but had no overall strategy and no one leading the effort across the worldtobeprivycompany’sreinventionviaallme- tra andthefoundationforFord’sfuture,Mulallywanted Mulallyleft countlessbusinesssilos.When tion madeupof than 165,000employees, Fordhadbeenadisjointedorganiza- the corporation. Having come from a tiny consulting firm, thefordstory.com), isagatewaytothecompany’smultipleso- The FordStory(www. Website, company’sflagship tered. The the mostsophisticatedsocialmediaeffortshehasencoun- dia channels. directly toconsumers, theultimategoalistocreateas Ford MotorCompany cial mediaofferings. cording toGillin,Ford’smultiplatformintegrationisamong company hasaggressivelyembracedallsocialmediaplat- shock at the old rust-belt automaker. Instead, he found an at- much enticing visibility of its brands as possible. This itsbrandsaspossible.This much enticingvisibilityof two-way relationshipisasweetspotforsocialmedia, Monty understoodfromtheoutsetthatsocialmediais In avastcorporation,with$120 billioninsalesandmore Because automakerssellthroughdealersratherthan dabbled in the various components of social media joined the giant automaker in July 2008, Ford had hen Scott Monty, Ford’s head of social media, Q4.2011 43 44 I Monty, Twitterimpressions millionsof thereweretensof Q4.2011 younger buyers who likely had never owned a Ford. know “We Facebook page. “We hadabiggerimpactthanSuperBowl Facebook page.“We month about the experience. They bloggedandtweetedabout month abouttheexperience.They A more than400millionimpressionsacrosstheInternet. mandate wastoflauntthefactthattheywereonlypeople in theUnitedStateswithcar, andtheyusedsocialmedia we do and how we do it, this will be the tipping point to get when LindsayLohanwasbeingadmittedtoorreleasedfrom and checkedaboxthatrequestedtheybenotifiedbylo- Web site peoplevisitedthe YouTube hits,and and132,000 and FordwastheNo. 1trendingtopiconTwitterandtheNo. 2 version of itsFordFiestaintheUnitedStates.version of Fordgavecars a rehabprogram,”Montysaid. ad,” Montysaid.“And itwasn’t justaboutthebigevent;itcon- Center in the company’s Round Rock, Texas,Center inthecompany’sRound Rock, headquarters. A a majorautoshowandoptedinsteadtointroducetheentire July 2010, thecompanyabandoneditstraditionalunveilingat and Montyhasorchestratedseveralmajorcampaignsbuilt In aworldwherebadnewstravelsaroundtheglobein theabilitytotrackandrespond brands like Apple and Google, and attract a new generation of them to go see for themselves.” them and market them is just as important as having great ve- that we are making great cars, but the way that we talk about the experience,andresultswereimpressive.Accordingto to getoutthemessage.Eachdriverhadcreateavideoeach trending topiconGooglefortheday. “And thatwasaday ter posts. AccordingtoMonty, theeventspawned99million to 100 enthusiastic digital influencers for six months. The to 100 enthusiasticdigitalinfluencersforsixmonths. tinued indefinitely to interact with fans on the Facebook page.” tirely revamped version of itsflagshipSUV,tirely revampedversionof theExplorer, in team of socialmediaspecialistsnow track roughly25,000 team of hicles,” Monty said. younger “To customers who watch what Web site, millionuniquevisitorswenttotheFord.com half duced simultaneouslyineightmajorcitiesandwithitsown Dell Computer company with social media, it will achieve the cachet of cool cal dealerwhentheFiestabecameavailable. chats withFordexecutives, photos, blogcommentsandTwit- campaign on Facebook. The 2011 FordExplorerwasintro- The campaign onFacebook. social media impressions on the day of introductionand social mediaimpressionsonthedayof on socialmediaplatforms. Dell’s glistening newSocialMediaListeningCommand n aDecember2010, MichaelDell,founderand pressevent, chairman of the $53 billion computer giant, introduced the$53billioncomputer giant, chairman of In the long run, Ford is hoping that by humanizing the The ExplorerFacebook pageincorporatedvideo, live The Ford alsousedsocialmediatointroducetheEuropean For example,whenFordwasreadytointroduceanen- instantly And inaworldwherebadnewstravelsaroundtheglobe Mehta said.Noting thatpeoplewereeagertoconnectand West” approachneeded someactivegovernance,andMehta media anda16-yearDellveteran.“Itprovidescompanywide roots effortswereeverywhere,trackinghowviralvideos ready aliveandwelldeepwithinDell’s innercircles. Grass- rate function, from sales to customer support to HR, isableto rate function,fromsalestocustomer supporttoHR, munity forumin1997. Hewasamazedtofindtruckdrivers, theabilitytotrackandrespondinstantlyisa mouse-click, model online,Dellhaslongembracedadigitalrelationship mand centersindifferentlocationsaroundtheworld.” Dell knowsboththegoodandbadbeingsaidinrealtime ment organization,problemswith newproductswouldnor- media in2006. Duetoitsviralnature,socialmediawasal- Dell-related “conversations” in11languageseverydayfrom for us,” Mehta said. “We canstepbackandmakesurewehave for us,” Mehtasaid.“We ing systemforDell,”saidManishMehta,Dell’s social headof ing and night. “It taught us a lot about the wisdom of crowds,” “Ittaughtusalotaboutthewisdomof ing andnight. world. MehtasaidthatDell’s commitmenttolisteningin- goalistoimbedsocialmediaacrossthefabricof way up. The with itscustomers. Butitssocialmediaeffortsrampthings view, andwecanlistentoalltheconversationsthatarehap- canre- about itsproductsandservicesand,mostimportant, and be an active part of everyconversationaboutitsbrands.and beanactivepartof address complaintsanddissatisfaction,encourageadmirers around listening. We’re nowlookingtodeploythesecom- We’re around listening. would beonTwitter. howFacebookpagesplayed,andwhattheresponses work, pening across all of ourproducts,pening acrossallof categoriesandbrands.” theblogosphere andotheronlinesources. Insodoing, book, the entire spectrum of socialmedia,includingTwitter,the entirespectrumof Face- tently toitscustomersdatesbackMichaelDell’s daysof the entirecompany, withits103,000 employeesaroundthe thefirstcompaniestotakeitsbusiness tively asDell.Oneof the rightconversations, therightengagementandpractices huge competitiveadvantage.“It’s becomeawonderfultool help each other out, Dellbegantoformallyembracesocial help eachotherout, dorm room at the University of Texas.dorm roomattheUniversityof lawyers andcasinopitbossessolvingproblemssharing leverage socialmedia.Forexample, intheproductdevelop- computing insights with each other at all hours of themorn- computing insightswitheachotheratallhoursof selling personalcomputersdirectlytocustomersfromhis spond proactively. set outtoputsomeorderintothe chaos. Now, everycorpo- “The CommandCenterbecomesasystemicearlywarn- “The In fact, Mehtalaunchedthecompany’sfirstonlinecom- In fact, Few corporationshaveembracedsocialmediaaseffec- Dell cannowengageitscustomersimmediately, quickly Eventually, Dellrealizedthat this“anythinggoes,” “Wild isahugecompetitiveadvantage. mouse-click The Korn/ f , erry i e T u T i nsT

Briefings onTalen T James Turner University foritsemployees. Already, 14classesaretaught Friday, andrepresentatives from18differentcorporatefunc- mally takeweeksbeforeenoughfeedbackreachedthecom- is especiallyusefulinDell’s B2Bspace.“Socialmediaisnot immediately whetherproblemsaresurfacing.Responsescan with thecompany. Dell’s Sheisnowoneof bloggers. chief was sooverwhelmedbyhervisit thatshelobbiedforajob and moreareontheway. To becomeanofficialDellbloggeror and readtweets, blogsandsocialnetworkpostingsknow play as well. We have to train parts of ourorganizationtoac- We havetotrainpartsof play aswell. areactionandmobilizeresponse. pany tosetoff best practices, andDellhasevenestablishedaSocial Media just a consumer play,” Mehta said. “There’s ahugebusiness just aconsumerplay,” Mehtasaid.“There’s the part of thecompany.the partof Oneblogger, already aDelladvocate, tors, andbroughtthemtoitsheadquartersdiscuss Dell’s the vastcustomercommunity, tobothadvocatesanddetrac- tweeter, the fourof anemployeemustpassaminimum of tions across the company attend. There is a healthy sharing of isahealthysharingof tions acrossthecompanyattend.There knowledge that.” happen inrealtimeratherthanweeksormonthslater. This courses to be certified. The companyhasalsoreachedoutto courses tobecertified. changes thelandscapedramatically. trackearlyadopters They cated todoingnothingbutlisteningviasocialmedia,which efforts. Nothing defusesanangrybloggerbetterthanaper- sonal visit, openconversationandawillingness tolistenon sonal visit, Mehta convenes a Social Media Leadership Council every Today, theproductorganizationhasitsownteamdedi- &l eadership F you ignore or don’t respond to a customer can have a huge rip- marketing communications director Rick Short, Indium has Indium Short, Rick director communications marketing Dell trackedalong-timecustomerwhohadneverpurchased mobilized toreachoutthecustomerbutbeforetheycould ferings ontheWebsite. This activity suggested that the cus- ware andalgorithms, Delltrackshowitscustomersclick ing betweenDellandacompetitor.Dell’ssalesgroup around on its Web siteandwhethersocialmediaeffortscata- around onits any ofitsEqualLogicstorageproductsandnoticedthatheor anticipate customers’ needs and desires via social media is fast based in Utica, N.Y. But under the direction of its brassy its of direction the under But N.Y. Utica, based in portant. In fact, Mehtasaidhehasanentireteamdedicated Infact, portant. ple effect,” Mehta said. “I worry about brands that are ignoring becoming table stakes to the period game. of time “That when tomer behaviorintheB2Bspace,”Mehtasaid.Forexample, to trackingsocialmedia’sUsingsophisticatedsoft- payback. that medium because the negative ripple can be sizable.” tomer mightbeconsideringalargepurchaseandwasdecid- dia’s DellbelievesROIiscriticallyim- returnoninvestment, lyze sales. “We nowhavesciencethatstartstotriggeroncus- lyze sales. “We Indium Corporation get there,thecustomerhadpurchasedanEqualLogicproduct. embraced social media so effectively that it has changed the changed has it that effectively so media social embraced she hadbeenclickingrepeatedlyonthesupportcontentof- In the hypercompetitive global economy, the ability to Though mostcompanieshaveyettoquantifysocialme- Though manufacturer and supplier of specialty alloys and solders dium Corporation,asmall,privately helddeveloper, ew people outside its niche industry have heard of In- ew peopleoutsideitsnicheindustryhaveheardof Q4.2011 45 Learning to Love Your Scissors

It might be hard to believe that a company founded in timers, dubbed Fiskateers, encouraged other women to 1649 could become a social media success story, but join an exclusive Fiskateer club and become members that is exactly what happened to Fiskars, the Finnish who could exchange ideas and designs. maker of high-quality scissors and crafting equipment. By mid-2008, the response overwhelmed Fiskars. According to the social media consultant Paul Gil- Instead of the expected 200 members, more than lin, who wrote a case study of Fiskars’s social media ef- 4,200 women had signed up. A blog by the four original forts, the Finnish company had grown frustrated in members flourished and within a year, “sales of Fiskars 2008 that sales of its famed orange-handled scissors supplies in stores that had been visited by a Fiskateer (which are in the Museum of Modern Art) had slowed in more than tripled,” Gillin wrote. “Online mentions of the United States. Shelf space in big box retailers was Fiskars products increased sixfold.” If a nearly 400-year- becoming more limited, and Fiskars realized it needed a old company can embrace social media and win, any- way to spice up its emotional connection to customers one can, Gillin said. in the United States. The Best Advice Fiskars’s marketing people decided that scrapbook- ing was a popular hobby upon which it could build a So what should those organizations that are still para- new campaign. But it needed to find out more about lyzed by indecision do about social media? Despite the who its customers actually were. Fiskars hired outside noise, social media remains in its earliest stages of ac- consultants to track social media conversations on the ceptance. Doing nothing, however, is no longer an op- ers that made them perfect bloggers. “In our field, we are Internet and create a strategy. tion. Gillin offered some practical advice: culture and driven the growth of this obscure but dynamic technologists selling to technologists,” he said. “Many of our Instead of the expected baby-boomer audience, Start by listening … to your customers, employees company. With 600 employees in 10 facilities, Indium is a customers have advanced degrees in science. You are not go- the research showed that it was actually Generation Y and business partners. science- and engineering-driven operation, and its materials, ing to fool them with spin and slick photos.” — younger — women, who were the more passionate Understand that this is a two-way medium. Mar- such as dipping paste and wave solder, are critical in the man- Short’s blogging corps were the “go to” people in their scrapbookers. The company used its Web site to engage keting has historically been a one-way experience be- ufacture of circuit boards for everything from cell phones to respective fields, but most were quietly obscure geeks who this group and hired four young women on a part-time cause it was the only game in town. But the game has jet aircraft. toiled in the shadows. “These were the guys who are develop- basis to use blogs and social media to encourage others changed. Connecting with its customers, who have countless tech- ing new chemical products and processes, and they are build- Don’t try to do everything. Do what makes sense nical questions and comments, is a key facet of Indium’s mar- ing and servicing these processes,” Short said. “What could be to share their passions with one another. The four part- keting efforts. For Short, who has been with Indium for 27 cooler than these people, especially in the eyes of our target for your customers. “The most common request I get is, years, social media, specifically blogging and videos, seemed customers?” ‘We have to have a social media strategy.’ ” Gillin said. like the perfect medium to find and attract new customers. In Not everybody bought into the concept. Some of the com- “My response is, ‘Why? Do you have a hammer strat- 2005, believing he could not take his company “into the pany’s top engineers refused to participate. Dr. Andy Mackie, egy?’ These are tools; use them as they make sense. murky depths” of social media without a personal under- a global product manager in the semiconductor and advanced Don’t go into this with the idea that you have to use so- standing of the environment, Short began his own blog. He assembly materials area and a company star, actually tried to cial media. Go in with the idea that there are business blogged about his own life, learned the subtleties of the me- discourage others from participating because he didn’t be- results you want to achieve. Social media may be one of dium, how to post, how to add photos and video and became lieve it was a good use of his time. Short was undaunted. the tools to help you do that.” facile with the tools. In time, Short and his team of bloggers had a page on the Respond. People expect a response. If you are in “As leader of our company’s foray into social media, if I company Web site called “From One Engineer to Another,” for a penny, you are in for a pound. You cannot avoid couldn’t walk the walk, nobody would follow,” Short said. and they were posting 73 blogs in six languages. The blogs, paying attention to what people are saying, good or bad. “We started out with the intent of being the leader in this with such esoteric titles as “The Limits of Aqueous Flip-Chip Understand the social media etiquette. Don’t do space. There was no value in being No. 3.” Cleaning” and “Heat Spring Thermal Interface Video Release,” anything via social media that you wouldn’t do at a In 2006, Short began to identify internal candidates to incorporated keyword search engine optimization, which en- semiformal cocktail party. Remember this is a become the company’s official bloggers. He recruited a group sured that Google searches would feature the blogs. Staff vol- conversation with your customers; being defer- of 15 engineers and focused, not on blogging, but on how unteers wrote entries about these topics using a defined set of

James Turner ential, courteous and respectful is essential. they might strengthen sales. “Social media is simply a tool,” keywords aimed at getting prospective customers’ attention. he said. “We’re not bloggers; we’re business people.” “If a customer is Googling something and they find you

The engineers he chose had the credibility with custom- and come to respect you via online media, they will trust you James Turner

Q4.2011 The Korn/f erry i nsT i T u T e Briefings on TalenT & l eadership Rifkin_sidebar_Fiskars_redo_ Q4.2011 46 june_21[1]FE.doc 47 48 “We’re gettingagreatpaybackonthis, andwewouldn’t doit “We’re Mackie. Afterhisinitialskepticism,whichwasbased,hesaid, Q4.2011 years ago. thecustomer’s seniorengineerscameupto Oneof from thesamequarterinpreviousyear. In2010, theblogs in badgrammar,” Mackiedecidedtotest theconceptwith if it wasn’t rewarding for us,” Short said. “These leadsareself- itwasn’tif rewardingforus,” Shortsaid.“These insignificant numberforalargeconsumerproductscompany and contactyouthatiswherethesalesprocessbegins,” before, Mackie asked if they had ever met. The engineerre- The theyhadever met. before, Mackieaskedif pressions of “spottypressions of teenstalkingabouttheirfavoritebands but is transformational for a company the size of Indium. but istransformationalforacompanythesizeof blogging infullswing,salesleadsincreasedby600percent back andchallengestohisassumptions. the power of bloggingonacustomer visittoMalaysiatwo the powerof him andsaid,“HelloAndy.” HavingneverbeentoMalaysia qualified, highly qualified and urgent. It’squalified, highlyqualifiedandurgent. adreamcome true.” Short said.Andthenumberstoldstory. In2009, with generated morethan11,000 salesleads, whichmightbean some ideashewantedtosharewithothers. Hewanted feed- on hisearlyimpressionthattheword“blog”broughtupim- Among Indium’s mostinfluentialbloggers: Dr. Andy Having builtasmallbutdevoted following,Mackiefelt I Bowl’s most admiredadsinacrowdedfield. Body Wash onthe2010 SuperBowlbroadcasttransformed Body receiver Isaiah Mustafa, was called “The Man Your Man Man receiver Isaiah Mustafa, wascalled“The reverent commercial,featuring actorandformerNFLwide into a viral YouTube hitthatbecametheNo.into aviral 1all-time most- in theworld. Could Smell Like,” and it emerged as one of the2010Could SmellLike,”anditemerged asoneof Super viewed sponsored channel on YouTube. The humorousandir- YouTube. The viewed sponsoredchannelon ary 2010, aviralmarketingwavethatquickly OldSpicesetoff also confirmedthatwehadsomethingusefulhere,”Mackie became the envy of everyconsumerproductsmanufacturer became theenvyof plied, “No,flooredmebut kindof butIreadyourblog.” “That toolkit, a 24/7 store of technicalcredibilityformeandmy a24/7storeof toolkit, company.” said. “Blogging has become a crucial part of mymarketing said. “Blogginghasbecomeacrucialpartof Procter &Gamble’sOldSpice it intoanovernightsocialmediasensation,butinFebru- t isn’t easytotakea73-yearolddeodorantbrandandturn What beganasaconventionaltelevisionadforOldSpice What The Old Spice brand, a part of theProcter&Gamble OldSpicebrand,apartof The The Korn/ f erry i e T u T i nsT

James Turner Briefings onTalen T Facebook phenomenon,especiallywiththe15-to34-yearold Kennedy, thecampaigninJulyby launchedasecond phaseof male demographicthatitwastargeting,andOldSpicereal- bumpthatmarketerscan mega-brand empire,gotthekindof most-viewed sponsored channel on YouTube. OldSpicealso most-viewed sponsoredchannel on ing theadsassocialcurrencywithfriends, andwehadtheop- ized ithadanopportunitytomarryconventionalmarketing ant soared. The commercial became a YouTube, Twitterand commercialbecamea ant soared.The as theOldSpiceMan. ated 186personalizedvideosinrealtimefeaturingMustafa YouTube, OldSpiceanditsadvertisingagency,and Weiden + views of the Old Spice campaign set off a streak of unparal- astreak of theOldSpicecampaignsetoff views of portunity toseehowapopularculturephenomenongot popular videos on YouTube, whichwas unprecedented.But popular videoson ton, communicationsdirectorforOldSpice.“Peoplewereus- tions thatcameviasocialmediaoutlets. Inresponding tose- that wasjustthebeginning.On July18, nearly95million lected questionsfrombloggers, themediaandcelebrities leled popularityandOldSpicebecame theNo. 1all-time creating aninteractivesessionwithMustafaansweringques- efforts withsocialmediatotakethebrandnewheights. started.” such asAshtonKutcheroveratwo-dayperiod,OldSpicecre- only dream of, and sales of OldSpicebodywashanddeodor- only dreamof,andsalesof “We had15millionviewsonYouTube,”saidMichaelNor- “We Taking advantage of the reaction on Facebook, Twitter Taking thereactiononFacebook, advantageof On July16, 2010, thetop10 most- OldSpicehadeightof &l eadership + Business, and many other publications. 300 percent. “He took over the Internet,” Norton “HetookovertheInternet,” declared 300 percent. 2,000 percent, respectively. percent, 2,000 Traffic toOldSpice.comsoaredby With social media, “You self-selectasaconsumer.You goto With socialmedia,“You No. 1inthemarketplace. factor: greatproductsorservices. Socialmediaisa learning integrating conventional marketing with social media. “The integrating conventionalmarketingwithsocialmedia.“The acting withthebrand.” ability tohaveatwo-wayconversationwithcustomerand and allowedOldSpicetoovertakeUnilever’sAXEproductas about Mustafa. base numbering630,000, 3,000percentand increasesof the sitesyoulikeandnottoothers. Peopleare now inter- had morethan80,000 TwitterfollowersandaFacebookfan liver onthepromise,peoplewon’t comeback.” Spice body wash and antiperspirant, accordingtoNorton,Spice bodywashandantiperspirant, great brands get you to try something, but if you can’t de- can’t you if but something, try to you get brands great create anaffinityforthebrandiswhatthisabout,”Norton Glenn Rifkin has written for The NewYork Times, Fast Company, Strategy experience onsomanylevels, Norton “Somany pointed out. said. The days of brands“talking daysof atyou” areover,said. The headded. This frenzy translated into the doubling of sales of Old salesof frenzytranslatedintothedoublingof This For Old Spice, the experience illuminated the power of For OldSpice,theexperienceilluminatedpowerof Sustaining thisconversationrequiresoneothercritical Q4.2011 49 50 Q4.2011 The Korn/ f erry i e T u T i nsT

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Briefings onTalen T Credit COOL Beantown Brewerkeepsitsedgewithcoldstorage &l F eadership J.D. J.D. cleverplayersovertheyears.thousands of An MITinstitution,thegamehasstumped ing boomsandbusts, overstocksandoutages. Sam Adams Now JimKoch,aHarvardman — isrewritingthereal-life beergame, multi-tiered distributionsystem,caus - tuations indemandripplethrougha no drinkingbutshowshowsmallfluc - BeerGame,whichinvolves played The Managementhave Sloan Schoolof or decades, graduatestudentsatMIT’s BY lawrencem.fisher Plays it Fisher_Leadership_5-22-cm.doc By LawrenceM.Fisher Analytics) AddaDashof (They — B.A., MBA, MBA, B.A., Q4.2011 53 54 Q4.2011 to turnthebeerdistributorsintohispartners, withaninitia- heisnowworking ing principlespracticedbytheJapanese, counseled Detroitautomakerstoadopttheleanmanufactur- Justasheonce an exerciseinsupplychainmanagement. framestheissuedifferently. Heseesitas ing Group(B.C.G.), NewYork Times, amongmoreprintableterms. call itwholesalerobbery, asinarecentop/edpieceThe milliontocandidatesforfederaloffice.Producers nated $15.4 largest politicalactioncommittee,andsince2000, ithasdo- Association maintainsthenation’sWholesalers third- Beer National an unnecessarymiddlemanattheirexpense.The lobbyists whohelpkeepthelawonbooks is accelerated at temperatures above 33 degrees Fahrenheit. Unlike wine, beer deteriorates with age, and that deterioration inventoryintheirwarehouses,two of atroomtemperature. BeerGame,wholesalerskeepamonthor stocks, asinMIT’s who inturnselltoretailersandrestaurants. To avoidout-of- beer,producers of wineandspiritsmustselltowholesalers, Prohibition.Bylaw, thelastinglegaciesof tem thatisoneof runsheadlongintothethree-tiereddistributionsys- strategy itsnearestcompetitor.and isnearlythreetimesthesizeof share incraftbrews, theindustry’sfastestgrowingsegment, ithasa20 percent beermarket, thetotalU.S. percent shareof BostonBeerhaslessthana1 worked outprettywell:Though has That most consistentlyhigh-qualitybeeronthemarket. makeitsSamAdamsbrandthe straightforward strategy: peal. Sinceitsfoundingin1984,BostonBeerhaspursueda as riceorcorn,fordistinctionandflavorratherthanmassap- craft beers,of definedasbeersbrewedwithoutadjunctssuch BostonBeerCompany, The man of thenation’s largestbrewer Prohibition.Kochisthefounderandexecutivechair- peal of upending therulesthathavegovernedbeersalessincere- But Koch,whospentseveralyearsattheBostonConsult- Many producerscursethethree-tiersystem But good tasting beer is fresh beer, and here Koch’s simple “We became — forenriching — andthe

the leadingcraftbrewer becauseweput the beerfirst. We dowhat’sright for the beer, andthebusinesswill take careofit- self. Italwayshas.” shareholders upinarms? the wholesalers’salestoretailers. andwhy aren’t Sowhydoit, ments arethebrewer’ssalestowholesalers;depletions tions growthbyapproximatelytwopercentagepoints. Ship- the companyexpectsthatshipmentsgrowthwouldlagdeple- itsvolumein2011,Freshest BeerProgramfor50percentof five distributors. BostonBeersuccessfullyexecutesits If give up.” It’sa bighit. profitthatIhaveto somethinglike$15millionof Koch’s end. theexcessinventory.ing costof bigcostswereallon The set bythereductionintheirwarehousespaceandcarry- adding orreactivatingunusedcoldstorage,butthatwasoff- mately 50,000 caseequivalents. Distributorsfacedthecostof the programresultedinlowershipments2010 approxi- of the beerindistributor’swarehouseassales. Initiationof tory costsbackintothebrewery, whichcannolongerbook house tostockpileinventory?” ish theirinventoryratherthanusingthemasabufferware- notjustreplen- Why Wednesday? for whattheydeliveredon need tomorrow, sowhynotsendthematruckonThursday we’llknowwhatthey’ll Byfiveorsixtonight, and shipitout. loadthetrucksovernight for tomorrow,” Kochsays. “They lenging, andthecostssignificant. the benefittobeerdrinkerclear, buttheexecutionischal- each daytofillintheirfive-daysupply. Theconceptissimple, their dailysalestoBostonBeer, whichsuppliesjustenough T on that.” people, tryingtorunagoodbusiness. andbuild Assumethat, tors wanttosellbeer;theymakemoney.good They’re grow hops.You can’t justshakeyourfistatthesky. Distribu- Boston.“Justlikeyouneedrainandsunlightto borhood of neigh- Plain at BostonBeer’sresearchbreweryintheJamaica tive hecallstheFreshestBeerProgram. That’s justin2010,That’s whentheprogramwaspilotedwith “Financially, it’shave arealproblemforus,” hesaid.“We One reasonwhynotisthatKoch’s systempushesinven- theday,“By theendof theyknowwhattheirordersare “The three-tiersystemexists,” Kochsaysin aninterview “The to 60daysahead,participatingdistributorsreport of estimating their needs andplacingordersfor30 just five days, and to keep it all refrigerated. Instead the beerintheirinventoryfromamonthortwoto oward thatend,Kochisaskingwholesalerstoreduce The Korn/ f erry i e T u T i nsT

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Briefings onTalen T Credit distributors will make more money; they will have fresher erable, “but they will become a favored supplier, because the man, publisher of Beer Marketer’s Insights. The cost is consid- vantage for Boston Beer over other suppliers,” said Ben Stein- copy. “He’s tried to create both a win-win and a competitive ad- doingbusiness.”way of BostonBrewing.It’shands andputsitintheof anew our ittakestheorderingprocessoutof practical standpoint, will bestoredcoldandgettotheconsumerquicker. Froma fresh beer;wewon’t becarryingexcessproduct;theproduct it’sWe’llhaveextremely gets itright, prettyphenomenal. theheadlinewillbe‘BeerGameRulesChanged.’right, he If AtlasDistributinginAuburn,Mass.ident of hegetsit “If Salois,we wholeheartedlyembrace,”saidJoe ownerand pres- est Beer Program to distributors, many were ready to listen. is also a persuasive speaker, and when he presented the Fresh- old Honda Accord with hop leaves littering But the he trunk. than the typical corporate executive. He drives a seven-year- dresses more like the Outward Bound counselor he once was spun radio spots he has broadcast over the years, and he self. Italwayshas.” what’s rightforthebeer, it- andthebusinesswilltakecareof Wedo leading craftbrewerbecauseweputthebeerfirst. volved withthecompanyunderstandsthatwebecame theday,of it’s therightthingforbeer. Ithinkeveryone in- It is also a step few competitors will be willing or able to programwasexplainedtous, andit’s becomeone “The Koch issoft-spoken,hisvoicefamiliarfromthehome- thecontrollingshareholder,”“I’m saysKoch.“At theend &l eadership 86, 8times. beer BostonBeermodeledthenormalpathof deterioration ishappening;at68, it’s fourtimesasmuch;at rise intemperature.Sofrom32 degreesto50, twiceasmuch degradationdoubleswithevery 18degreeFahrenheit rate of The fresh flavorandtaste. nous factorsthatcausetheloss of Freshest BeerProgramtakestheconceptfurther. turned beereachyear,The butitdifferentiates thebrand. best-selling craftbeer. moveresultsin$4million re- That the bottle,andSamAdamsveryrapidlybecamecountry’s came thefirstbrewerinAmericatoputfreshnessdatingon and analyticsarefocusedonhowtobebetter. In1988, hebe- cheaper thanthebigestablishedplayers, hisstrategy soallof than thecompetition.Asabrewerheknewcouldneverbe youcoulddosomethingbetterorcheaper had abusinessif He’s probablyhelpingthemtogrow.” productive, helpingthemrethinkthewaytheydobusiness. changethatwillmakethemmore really forcingthekindof the marketplacebeyondfloggingBudLite,”Pirkosaid.“Jimis adigm thatisforthefirsttimeaimedatdistributingbeerin ers tookonthegiantsinthatindustry. try thewayStarbucks, Peetsandotherspecialtycoffeeroast- thebeerindus- brewers arenowassumingtheleadershipof saidthatBostonBeerandothercraft consultancy BevMark, cated because it would cost the majors so much more to do it.” beer out there, and it’s something that can’t really be dupli- Beer degradeswithtimeandtemperature,theexoge- Kochusedtotellclientsthatyouonly As aconsultant, “Everyone isnowlurchingtowardanewmarketingpar- Tom Pirko, thebeverageindustry managingdirectorof Q4.2011 55 56 Q4.2011 also arevulnerable:topolitical pressures fromconsumer whining aboutwholesalerobbery isthefactthatdistributors for onereason.It’s what’s bestforourbeer.” thebeersupply chain,andwedoit complete reinventionof industry hadeverdoneanythinglikethis, Kochsaid. “Itisa tant tomanufacturersinthepastdecade,noonebeer time” inventorypracticeshavebecomeincreasingly impor- “justin While systems tokeepthewholeprocessontrack. tanks tostoretheunshippedbeerandsophisticatednewI.T. additional costsBostonBeerfacedforaddingfermentation sternation inthefinancialcommunity, nottomentionthe cent bykeepingaweek’s beerinthecooler.” worthof that70per- couldimmediatelyeliminate90percentof “You dation happenedinthewholesaler’swarehouse,”Kochsays. ture foreverydayinthatprocess. from brewerytoconsumerandgaugedtheexpectedtempera- It isalsogoodforthesupplychain. Lostintheproducers’ Nevertheless, the$15millionprofithitcaused somecon- thedegra- bottomlinewasthatabout70percentof “The IPO stocks. Soheadded neckhangerstoSamAdamsbottles V lot of valueforpeople.”lot of long term,andyoucan’t arguewiththeresults:He’s createda great valuetothecompany. He’s focusonthe thebeaconof independence, andthatindependencehasactuallybeenof leadership.other kindof Jimstronglyvalueshis tually lookingatwaystomakeitmoreviable,whichisan- BostonBeer’sboard.“Sohe’sValette, amemberof ac- Michel small ones, saidJean- becausetheycouldneverduplicateit,” away that’s aplustothebigbrewersanddetriment tothe men thathasonlybeenacceleratedbytheInternet. groups, andtothebroadertrendtowardeliminatingmiddle- “People love to bash the three-tier system, but if itgoes “People lovetobashthethree-tiersystem,butif to theinstitutionalinvestorsthat usuallybuymost making sharesavailabletoconsumers, inaddition was anunusualofferingbecause Kochinsistedon cht &QuistthattookBostonBeer publicin1995. It alette ledtheteamatinvestmentbankHambre- The Korn/ f erry i e T u T i nsT

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Briefings onTalen T Credit to theDutchAuction.” allocationthat’shave amethodof fair, andthat’s how wegot Sowelookedatitandsaid,howcan you doingI.P.O.s? way of ourselves, wasthis a one-timephenomenonoristhisreal thesharesremainedwiththeseinvestors.Weasked than half “Butwetrackeditandfoundthatafterayear,an I.P.O. more to investorswhobuyastockfortheshort-termbounceafter this demandwas[from]flippers,” Hambrechtsaid, referring initial publicoffering(I.P.O.). the DutchAuctionofferinghelaterorchestratedforGoogle’s saidBostonBeerprovidedtheprototypefor vestment bank, lion, butanideawasborn. to SamAdamscustomers, thebankershadtoreturn $40mil- With only$10 millioninsharesallotted totaling $50million. spectus, andmorethan100,000 customersmailedinchecks with a1-800numberatwhichconsumerscouldorderpro- Remarkably, after15years, nearly9,000the original of “Traditionally, theinvestmentbankersclaimed thatall thein- of founder,Bill Hambrecht, chairmanandC.E.O. &l eadership W make thebestbeerinAmericaandgiveittopeoplefresh.” “IknewIcould early microbrewerieswereinconsistent. food” beer, importswereoftenstaleandskunky, andthefew ours.”country of majorbrewersproducedinsipid“fast- The couldn’t beerinthislargeandwonderful getagreatglassof view:thatyou thinking aboutitfromtheconsumer’spointof work foralargecompany. he nolongerwantedtobeaconsultantanddidnotwant into thebeerbusiness. ButaftersixyearsatBCG,herealized ther, oldestsons grandfatherandfourearliergenerationsof since hestartedthecompanyin1985. samecalculushasinformedKoch’s That strategy statement. the addedcosttheyappeartobeonquarterlyearnings the addedvaluetheyactuallyareinlongterm,ratherthan view Koch’s innovationsinproductionanddistributionas prices. $231 then,butareworthabout$3,036todayatrecentclosing 33shareseachpurchasedcost been agoodinvestment:The It’sstockholders, commonstock. stillholdtheir33sharesof consumer stockholders, the whocompriseaboutathirdof educate people, to make them knowledgeable. This wasa educate people,tomakethemknowledgeable. This accounts thatwecoulduseto focused onasmallnumberof so weputoutthebest-trainedsales forceintheindustry.We Icouldmakepeopleknowledgeable, Iwouldhavedrinkers,If rance andapathy:peoplewhodidn’t knoworcareaboutbeer. ers ascompetitors,” Kochsaid.“Mycompetitionwas igno- would havetodowasdeliverit. dedicated salesforcetosellthebeer. All thedistributors To enticethedistributorstocarryhistinybrand,hecreated a did withhisoldstationwagon,buthehadbroaderambitions. tobarsandretailerswithinthestate,whichhe beer himself MassachusettslawpermittedKochtodistributethe with it. theestablisheddistributorswouldbother small thatnoneof but hefacedanotherimmediateproblem.BostonBeerwasso milliontoday.worth about$24.4 2 percentstakeinthefledglingcompany, whichwouldbe light beer. Not abletoaffordOwades’salary, hegavehim a theday,ter brewmasterof Owades, Joseph theinventorof industry connections, heapproachedtheacknowledgedmas- tion tolargebrewerieswithextracapacity.With hisfather’s With thefamilyrecipeinhand,hecontractedearlyproduc- “I knew about brewing.” Koch said. “The epiphanywas “I knewaboutbrewing.” Kochsaid.“The Koch hadn’t gonetoHarvardinorderfollowhisfa- return,investorsaremoreinclinedto With thatkindof “From theverybeginning,Ididn’t viewothercraftbrew- Koch couldmakeconsistentlygoodbeerfromtheoutset, Koch structuredBostonBrewingdifferently. brewmasterandbottlewasher, C.F.O., C.E.O., brewing operations, withtheownerservingas neering craftbrewersbeganasscaled-uphome hile New Albion,SierraNevada andotherpio- Q4.2011 57 58 Q4.2011 ies operatingintheUnitedStates, morethan anincreaseof nence forgranted.Today, thereareabout1,750craftbrewer- cannot affordtorestonhislaurelsortakethebrand’spreemi- Nevertheless, BostonBeerrose12percent. and thoseof Koch grew only1percentin2010, craftbeerrose 11percent, salesof chain besidestheconsumerwhocares.” responsibility, theonlypersonin becausefranklywe’re Francisco, theyholdthebrewerresponsible.Soweacceptthat SamAdamsinSan ity iswhensomebodygetsabadglassof real- truck andsenditoutfromthebrewery,” Kochsaid.“The audits, lessthan2to3percenthasfallenshort. beer ontaptastedasgooditdoesatthebrewery. Inrecent draft audits, upto20,000 tastingsperyear, tomakesure his chlorine. Inresponse,heassignedthesalesforcetoperform hoses, andmanywerepouredintoglassesthatsmelledof had beenstoredwarm,othersweredeliveredthroughdirty ing SamAdams, wasnotuptohisqualitystandards. Some draftbeersserved,includ- discovery thatupto15percentof inthemarket.” mytime,twodaysaweek, of staying innovativeandcreative.Evennow, Ispend40percent that gapdoesn’t existiscrucialtonotlosingyourway, andto aren’t makingthedecisions,” Kochsaid.“Makingsurethat people closesttothecustomerhaveinformation,but but lacktheinformationaboutwhat’s reallygoingon,andthe where theseniorpeoplehavepowertomakedecisions, to goonsalescallsretailstores, restaurantsandbars. on thejobinatutorialwithKochhimself,whoalsocontinues theirfirstday the programstillspendfirsttwohoursof cate thetradeandconsumersaboutcraftbeer. New hiresin beers andbrewing,whotrainwaitstaff,dotastings, andedu- and customerloyalty.” whole differentapproachtobuildingconsumerawareness interesting... Source: Socialnomics content. to user-generated largest brandsarelinks for theworld’stop20 25% ofonlinesearchresults YOUR ONLINEREPUTATION? ARE YOU TAKING CHARGE OF None of this is simple altruism. While totalbeersales While None thisissimplealtruism. of “My responsibilitydoesnotstopwhenIputabeeron Kochmadetheunpleasant Spending timeinthemarket, acompanygetsbigger, youhavethisdichotomy “When Today BostonBeerhas300salespeople,experiencedin opportunities togiveyourconsumerabetterexperience.” constantlygottogetbetter. gotfind You’ve You’ve the pack. what weweredoingbackthen,nowwe’dbeinthemiddleof wewerestilldoingexactly best beerinAmerica1984.If brewer. ButKochisstilllookingforways toimprove. tion andglobalization,itisnowthelargestAmerican-owned consolida- to theresearchfacilityinBoston.Andbyaquirkof production breweriesinPennsylvaniaandOhio, in addition glass maintains flavor release during the drinking experience. Adams BostonLager. Alaser-etchednucleationsitewithinthe signatureNoblethe releaseof hoparomasfoundinSamuel thebeer,sign thathelpssustaintheheadof whichenhances ideal beerglass. theglassisaneck-and-lipde- Onefeatureof the pioneerinvarietal-specificwineglasses, toproducean with familyandfriends. days, anddrinkerswerescramblingtofindbottlesshare sale intheUnitedStates, releasedjustintimefortheholi- bottlesfor They brewedonly13,421 like brewcalledInfinium. Germany, theworld’soldestbrewery, tocreateachampagne- Weihenstephan in wine, OpusOne.BostonBeerteamedwith deRothschildthatresultedinthehyper-premium Philippe the famouspartnershipbetweenRobertMondaviandBaron 2010.the lastfivemonthsof year. Itworked:BostonBeersetnewsalesrecordsineachof company’s diverseofferings, including 10 newbeersjustlast ety packs, the whichallowcustomerstosampleseveralof shelves every12weeksorso. Andhe’s alsoputtogethervari- ness and many other publications. He is based in San Francisco. Lawrence M. Fisher has written for The NewYorkTimes , Strategy +Busi- S the nextyearortwo. ies areintheplanningstages, andtheycouldcomeonlinein 160 over last year. Koch estimates that more than 600 brewer- Koch has introduced a rotating line of seasonalbeers Koch hasintroducedarotatinglineof du jourinfoodandbeverages. above all,their“localness,” whichhasbecomethebuzzword warm and darkerinthecoldmonths, lighterandcrisperinthe “Better is not a static thing,” Koch said. “We madethe “Better isnotastaticthing,”Kochsaid.“We Boston Beernowownsallitsownbrewingcapacity, with In asimilarvein,KochworkedwithRiedelGlasAustria, On amoreambitiousnote,Kochhastakenpagefrom Staying onestepaheadrequiresmorethanfresherbeer. — whichallowshimtoputsomethingnewonretailers’ ing advantage of theirnovelty,ing advantageof theirmystiqueand quality orconsistency, theywillhavethemarket- thesenewbrewerieswillmatchhis while fewof But themovement. about Americans’embraceof andheisenthusiastic tion thatKochhelpedstart, o itisanexcitingtimeforthecraftbeerrevolu- The Korn/ f erry i — richer e T u T i nsT

Hal Mayforth 59548_Briefings_fnl.indd 1 “One of the most important and useful “One ofthemost importantanduseful Visit www.kornferryinstitute.com/nofearo“ailure formore information. Available wherever booksande-books are sold.

Briefings onTalen T Credit 978-1-118-00078-6 •$27.95 books for 21st- century leaders.” other international news outlets. other internationalnews solutions. Burnison isaregular contributortoCNBC,CNN, and Fox Business, aswell asto the world’s largestexecutive recruiting ‘rm andaleadingglobalprovider oftalentmanagement G B isCEOandmemberofthe board ofdirectors ofKorn/Ferry International, &l eadership —A — V, ChiefBusiness Correspondent and Weekday Host, CNN in aclimate whenleadershiphasnever in aclimate whenleadershiphasnever A V “A must read for any executive, — W B,Distinguished Professor ofBusiness, , ChiefBusiness Correspondent and Weekday Host, CNN • • • • • • • • Still Surprised: AMemoir ofaLife inLeadership University ofSouthern California;author, and others Liu Chuanzhi,founderofLenovo football onanylevel John, thewinningestcoachin McKissick Harvard Drew Gilpin Faust, ‘ rst femalepresident of Point West retiredof superintendent General Franklin “Buster” Hagenbeck Vicente Fox, formerpresident ofMexico Carlos Slim, theworld’s richestman New York CityMayor Michael Bloomberg resilience, and compassion necessary tolead. resilience, andcompassionnecessary provide rare insightintotherisks,vision, career-de‘approached crucial, ning moments philanthropy. • eirfrankaccountsofhow they in business,politics,themilitary, education,and withsomeofworld’sinterviews foremost leaders No Fear ofFailure been neededmore.” captures candid, one-on-one captures candid,one-on-one Q4.2011 , 59 4/8/11 2:38 PM 60 Q4.2011

glo

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the caseof from world’ssmallestcountr B would seemaslikelytoclimbtheMatterhorn astosit mining businessesaroundtheworldthatuse itsdrillsand million to$15ayearteachingits20,000 employees mous Liechtenstein-basedpower-toolbusinessspends$10 months, themtakepartinatwo-orthree-day training allof fasteners. Not surprisingly, itsemploy- some80percent of than oncethathemustbecrazy. about thecompany’sculture.Michaelhasbeentoldmore and feelingswiththeir colleaguesinthesamecourse. around atablediscussingtheirfeelings.Yet, every15to18 honest aboutthemselves and,then,tosharetheirthoughts course where they are encouraged, first, tobeopenand course wheretheyare encouraged,first, ees are male, many of themruggedfactoryworkers who ees aremale,manyof Yer al plaYer Hilti’s customersaretheconstructioncompanies and Hindle2_Hilti_interview_6-4[1]FE.doc money wheretheirmouthistotheextent that MichaelHiltihas. Hisfamily’sepony- this platitude,butfewhaveputtheir top corporateexecutiveshavemouthed BY timhindle “People areourgreatestasset.” Many Y: Y:

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Briefings onTalen T Credit &l eadership Q4.2011 61 62 15-minute walk with another participant, one on one. The oneonone.The 15-minute walkwithanotherparticipant, More than 90 percent of thecompany’s employeeshavere- More than90percentof Q4.2011 Hilti camethirdin2010. Andthereispositivefeedbackfrom ral retreats. Inonesession,eachparticipantgoesfora10- to its ownemployees, demonstratedbythecompany’shighre- ing to make eye contact. Sometimesthesessionstakeplace ing tomakeeyecontact. would havechangedtheirlives. ning forlessthanadecade,andold-timersinthecompany G.E. plant G.E. in the 1930s, whereby managers can motivate em- walking partner, abitlikehopefulsatspeed-datingsession, around acampfire. Rather, jobperk. modestru- a sortof theytakeplaceinquiet, pendent assessment of “greatpendent assessmentof placestoworkinSwitzerland,” ployees merely bypayingattention tothem.Somuchcareis participants talk as they walk, thentheyswitchtoadifferent participants talkastheywalk, tention ratesandtheannualglobal employeeopinionsurvey. helps new people to integrate quicker. And there must be ductivity. courseshavebeenrun- The doubt thatitismoneywellspent. lavished ontheHiltiindividualthatitmustbegoodforpro- lion-dollar annualinvestmentinwhatis, theper- ineffect, group inadifferentway, toopenupwithoutnecessarilyhav- courses orthereturnsthatHiltiisgettingonitsmultimil- say that if theyhadbeenabletodothem20 yearsago,say thatif it sponded to each of thelastfivesurveys,sponded toeachof andinthelatestsur- some thephenomenon firstnotedata “Hawthorne effect,” itsemployees.sonal developmentof ButMichaelHiltihasno so thatbytheendeveryonehasbeenforastrollwithevery- one else. This allows them to get to know the members of the allowsthemtogetknowthemembersof one else.This As for the benefit to the company, it says that the program It is not easy to measure the effectiveness of such It isnoteasytomeasuretheeffectivenessof There aresomemoreobjectivemeasurestoo. Inaninde- There The coursesarenotheldinlusciouscity-centerhotelsas The M The culturething 142 million Swiss francs was not without its challenges. The 142 millionSwissfrancswasnotwithoutitschallenges. The flattery, thenHilti year thatitannouncedwould paynodividendin2009. A is the sincerest form of is thesincerestformof work forHilti.” vey 89percentsaidthat program was introduced to reduce staff by 10 percentovera program wasintroducedtoreduce staff billion)andanetincomeof billion Swissfrancs(about$4.8 the factthatothersare they were“proud to two-year period,andemployees atheadquarterstookapay acompanythathadrevenuein2010 almost4 the headof of iron.Hisriseto that insidethevelvetglovethereisafistof lines. Butnooneelse,MichaelHiltisaid,“isdoingitwith lens maker, issaidtobeintroducingsomethingalongsimilar looking atitsmethods. CarlZeiss, forexample,theGerman cut 2008. companyexpectedsuchpoorresultsthat cession of The timessincehe company hasbeenonitskneesacoupleof should takecheerfrom such disciplineasus.” started workingforitalmost40yearsago. — Its mostrecentcrisisoccurredduringtheworldwidere- Finally, imitation if with seniormanagementtaking alargercutthanthe inquiring expression. But he soon gives off thesense inquiring expression.Buthesoongivesoff ichael Hiltiisinhismid-60s, softspokenwithakindly The Korn/ f erry i e T u T i nsT

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Briefings onTalen T Credit 1974, andMichaeldecidedtoreturnLiechtensteinhelp rest. Alltravelwasrestrictedtoeconomyclass.rest. Ultimately, the ied economics at the University of St. GalleninSwitzerland St. ied economicsattheUniversityof ing thefirmthathisfather, Martin,founded in1941. Hestud- attack spentalltheirenergiesfighting oneanother. and joined Chase Manhattan. The bankwasabouttoposthim and joinedChaseManhattan.The we sticktoit.” pany madethenwastorecruit someone fromoutsideonto board appointedtorunthecompany afterhisfather’sheart pain wasnotasbaditmighthavebeen,andattheendof the executive board. “It’s a very big risk,” hesaid,“tothe executiveboard.“It’s bringin averybigrisk,” to run a business. The members of thethree-manexecutive membersof to runabusiness. The the business. to Tokyo whenhisfathersufferedasevereheartattackin A the yearcompanyannouncedthatithadmadeaprofit. dividend could have been paid. But it was not. AsHiltihim- dividend couldhavebeenpaid.Butitwasnot. self said in a more general context, “whenwesaysomething, saidinamoregeneralcontext, self As a young man, Michael Hilti had no intention of join- As ayoungman,MichaelHiltihadnointentionof What hecamehometo,What hesaid,wasalessoninhownot Hilti believes that one of thebiggestmistakes thecom- Hilti believesthatoneof &l eadership “Succession planning,” Hilti said, “is one of themajorrespon- “Succession planning,”Hiltisaid,“isoneof (or MichaelHiltihimself)ishitbyatree.Likewiseforallse- (and getsintotherunningfortopjob)withoutfirsthav- identified at the time was the failure of bigdepartmentsin identified atthetimewasfailureof Oneflaw into thechangingglobalbusinessenvironment. ing hadsignificantexperienceinsidethecompany.The board wanted toblowfreshairthroughout theorganization,andit age of 49,age of hissuccessorwasannouncedthenext Monday. anexecutivedirectordiedonaFridayatthe nior posts.When program. One of themeventuallyleft tofollowaHinduguru. program. Oneof program thatitcalled“Leadership MakestheDifference.” It to changethis, thecompanyintroducedapioneering training the organizationtotalksmallerones. anattempt Aspartof knows precisely what is to happen if theCEOorchairman knows preciselywhatistohappenif looked outsideforunconventional individualstosetupthe sibilities of aleader.”sibilities of seriously atHilti,andnobodycomesontotheexecutiveboard of 1982,whenthecompany’spioneersstruggledtotakeit of Another crisisoccurredduringtheworldwiderecession The aimwastoembedthecorporateculture The fighting amongtheprincelingsoversuc- miliar with the company’s ways and none of miliar withthecompany’swaysandnoneof not live for more than a few years (in fact, he not liveformorethanafewyears(infact, an outsideratthatlevel.” manwasnotfa- The the time, it seemed as if MartinHiltiwould the time,itseemedasif the threedirectorskneweachotherwell.At cession. survived until1997),sotherewasconstant Today, successionplanningistakenvery — Q4.2011 the com- 63 64 Makes theDifference” a wasabouttobedroppedin favorof Q4.2011 Bertelsmann Prize in recognition of its“exemplaryBertelsmann Prizeinrecognitionof corporate many interactions. The onlywaytomaintain standardsisto many interactions. The more than200,000 customercontactsthatthecompany’s fered aone-timetrainingcoursewithstrongfocusonper- we hadwasnotenough.” Journey, working daysof anditinvolvesorganizing 32,000 was sosuccessfulthatthecompanywonprestigiousCarl business context. business context. brand new approach. “We wanted more,” Hilti said. “What wantedmore,”Hiltisaid.“What brand newapproach.“We pany’s rulesonhowemployeesmanagethemselvesandoth- the otherhand,occurregularly;thereisastructuredfollow- the prizethatyear, heknewthetrainingprogramthathad up process;andthelessonsarecarefullyintegratedintoa corporate-culture workshopseveryyear. firstprogram of- The contributed somuchwouldbeabandoned.“Leadership culture.” ButMichaelHiltisaidthatevenashewasreceiving employees makeeveryday. Nobody candirectlysupervise so ers sonality development and no follow-up. The OCJ“camps,”sonality developmentandnofollow-up. The on — The ultimategoalistomaintainqualitycontrolover the The The companycallsthenewapproach“OCJ,”The OurCulture more firmlywithinthegroup. By 2003, theprogram Hilti employeesthattheyneedtolookatthemselvesforguid- managers. Participantsaretaughtthatitistheywho arere- for runningOCJaroundtheworld.Atcoreeverywhere in a common set of values in acommonsetof who first came to Switzerland in the 1980s to study at St. Gal- who firstcametoSwitzerlandinthe1980sstudyatSt. vents us from being a great company?” they areaskedwhile vents usfrombeingagreatcompany?” ance. “All trainingstartswiththemirror,” saidEivindSlaaen, are thesamebasicprinciples. Butineachmarketthese are now hasmorethan70in-housetrainerswhoareresponsible train employeestocarrythecompany’sculturewhereverthey their answers. the head of thetrainingoperation.SlaaenisaNorwegianthe headof tuned tomeetlocalpeculiarities. teamwork, integrity,teamwork, courageandcommitment. len University, Hilti’s atrainingground formanyof senior go. Their behavior is then steered by a deeply ingrained belief behavioristhensteeredbyadeeplyingrainedbelief go. Their create whatitwanted.Sobuiltthecoursesbyitself,and standing in front of themirror,standing infrontof beforesittingdowntowrite sponsible fortheirowncareers, notthecompany. pre- “What A central totem of thetrainingisamirror,A centraltotemof a reminderto The mirrorreflectsanideadevelopedbyJimCollins, au- The This time,thecompanywasunabletofindoutsiders This — values thataregroundedin The Korn/ f erry i e T u T i nsT

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Briefings onTalen T Credit — H The peopleatthetop rope required of atopexecutive,MichaelHiltisaid,isexhausting required of mid-50s. Somearere-employedasconsultants. Aformerex- more executiveresponsibilitiesthantheirGermancounter- Dane, waselectedtotheboardjustlastyear. far to board meetings: six of them are Swiss. The seventh,a themareSwiss.far toboardmeetings:sixof The into solar energy based in Albuquerque, N.M. In2010, basedinAlbuquerque,N.M. into solarenergy Hilti’s failure andtotakecreditthemselvesforsuccess. where from20 to40workingdays ayear. well-over-56 MichaelHiltinowsits. ager 38.was namedtotheexecutiveboardattenderageof and it cannot be done effectively beyond a certain age.The other already global are expected to do extensive homework, whichmayinvolve are expectedtodoextensivehomework, are occasions for casting off theego.are occasionsforcastingoff was “personal humility.” companytoobelievesthatper- This Collins said, we should look out of thewindowandgive Collins said,weshouldlookoutof appointed to the main board of directors,appointed tothemainboardof whichiswherethe need tolookatamirror, atourselves. Too oftenpeoplere- board directorsarewellpaid.Andtheydonothavetotravel parts. Hilti’s meetsfiveorsixtimesayearandeachmeeting pervisory) board.ButLiechtenstein’s supervisoryboardshave boards: anexecutive(management)boardandoverall(su- taking tripstoseecustomersontheirownground.Potential that owns 100 percent of thecompany’sshares.that owns100 percentof Ortheyare theMartinHiltiFamilyTrust,tive astrusteesof thevehicle thor of thebestsellingbook“Goodthor of toGreat.”With success, directors arewarnedthatthejobisgoingtoinvolveany- loses the services of itstopexecutivescompletelyintheir loses theservicesof lasts for two days. There arenosubcommittees.lasts fortwodays. Everything There leaders of great companies from leaders of themerelygood greatcompaniesfromleadersof leaders of graphic shift in the focus of Hiltiactivities inthefuture,”ac- graphic shiftinthefocusof cording to the company’s latest annual report. ButMichael cording tothecompany’slatest annualreport. credit toothersfortheachievement;butwithfailure,we ecutive directoriscurrentlyoverseeingtheinitialintegration ered bytheboardasawhole.Beforemeetings, directors solar businesswasthefastestgrowingdivisioningroup. thecoinisthatpeoplearepromotedearly.side of Oneman- sonal humilityisessentialforgreatleadership. OCJcamps spond inexactlytheoppositeway, eagertoblameothersfor of thegroup’sof newpurchaseintheUnitedStates, aventure audit, nominations,audit, compensationandsoon As inGermany, companiesinLiechtensteinhavetwo The retirementruledoesnotmeanthatthecompany The This soundsparochialforacompanywhosemarkets are This isdemandingforapart-timerole.ButHilti’s seven This Others whoretirefromtheexecutiveboardremainac- One featurethatCollinsidentifiedasdistinguishing — retire whentheyhittheir56thbirthday. traveling The ilti’s leaders are young. There is a rule that executives that rule a is There young. ilti’sare leaders and are expected to get more so. There willbe“ageo- and areexpectedtogetmoreso. There — over 40 percent of itssalesareoutside Eu- over 40percentof &l eadership — is consid- “You havetocelebratesuccess,” Hiltisaid,andeveryyearthe “You The fourvalues 60 nationalitiesrepresentedinthecompany’sLiechtenstein A Morita, a founder of Sony:“globalMorita, afounderof localization,”aphrasehe There is something there of the famous dictum of Akio thefamousdictumof issomething thereof There Hilti arguesthatitisbettertogetlocalpeoplewhohaveinter- market (the population of Lichtensteinisjustover35,000,market (thepopulationof of for instance went intomarketsallovertheglobe. whom 25,000 are of workingage)meansthattherearesome whom 25,000areof work is central to everything. “We don’t wantprimadonnas work iscentraltoeverything.“We it orders. national experience and hopethattheywillcometounderstandtheHiltiway. around team results. There arenobonusesbasedonindivid- around teamresults. There where bribery has long been endemic. Notwhere briberyhaslongbeenendemic. surprisingly, the admit, “doesadmit, notalways makebusinesseasy.” Manycustom- both annualandlonger-term,arebasedontheperformance ployees’ behavior. Forexample,anyonecaughtcheatingon that there may be at the top of theorganization. that theremaybeatthetopof the prizeisnotgiventoanindividual;itawardedateam. headquarters. They helptocounteranySwiss-Germanbias headquarters. They here,” Michael Hilti said. The rewardsystemispartlybuilt here,” MichaelHiltisaid.The used to describe the way his intrinsically Japanese company used todescribethewayhisintrinsicallyJapanese ual performance group’s standagainst corruptionhasonseveraloccasionslost company awardswhatitcallstheHiltiInnovationPrize.But ers comefromindustrieslikeminingandconstruction, erance forviolations, andthis, asMichael Hiltiisthefirstto expenses is out, immediately.expenses isout, sanctionsaredraconian, The system couldeverworkinafinancialinstitution.Allbonuses, of teams.of achievement. Andsoaretheacknowledgementsof ond value,liesits“stand againstcorruption.” iszerotol- There At the heart of whatthecompanycallsintegrity,At theheartof itssec- In any case, the severely limiting factor of thelocallabor In anycase,theseverelylimitingfactorof The philosophy of integrity extends to all areas of itsem- integrityextendstoallareasof philosophyof The says Michael Hilti. prima donnas here,” “We don’t want to everything. Teamwork is central teamwork, integrity,teamwork, Team- courageandcommitment. thecompany’sculturelieitsfour“values”:t theheartof — than tobringinpeoplefromthosemarkets — which castsdoubtonwhethertheHilti — of new marketslikeIndiaandChina, of Q4.2011 65 66 Q4.2011 not condemnedtoremainpoor. Lookinthemirror, andset whatHilti able tomanageoneself,change andbreakoutof and innovativebusinessfields.” In 2010, itbought anAmeri- and everybodyknowsit. for galleons off the coast of the Philippines. whom Hilti supported many years ago when he was searching of the French explorer Franck Goddio. Franck is “an old friend” nancing have to last beyond a single season. able.” Sustainability is important. The fruits of the projects’ fi- “have to be run like a business; otherwise they are not sustain- archaeology to youth orchestras. All of the projects, Hilti said, “cultural projects,” which embrace anything from underwater the Family Trust, has for many years supported a number of firm. The Hilti Foundation, owned jointly by the company and Michael Hilti has some unconventional interests outside the Instrumental Learning tion businessesinNorth America. the pastfiveyears. Itsaimistousetheknowledge thatitac- “CO₂ Itmonitorsitsannualcalculationof the environment. quires fromitsenvironmentalawarenessto“develop new calls “thehabits.” circleof We maybebornpoor, butweare can company, theleading solar-panelinstalla- oneof Unirac, emissions peremployee,”afigurethathasbeendecliningfor The third value, courage, refers to an attitude of being thirdvalue,courage,referstoanattitudeof The The firmhasalsomadeadeterminedcommitmentto The Perhaps the most notable project is the underwater activity 380,000 children Venezuelan government and private donors like Hilti, some spawned throughout that country. Thanks to the efforts of the tra of Venezuela and the system of music teaching that it has heart is the now world-renowned Simón Bolivar Youth Orches- extent of the discoveries is amazing.” Bonn and Madrid, World Archaeology magazine said that “the a major exhibition in Berlin, before they moved on to Paris, ered in centuries of silt. But when the finds were first shown at relics that have been retrieved were lying on the sea floor cov- murky and polluted, and many of the statues, coins and other has not been easy. The waters now covering the cities are with the company’s logo clearly visible on their arms, the job reference to the riches of the merchants who lived there. nopus’s great port, to the sunken cities of Heracleion and Canopus. Ca- ancient world. It shifted its focus then to the northeast of the of the lighthouse of Pharos, one of the seven wonders of the and identify the old harbor of the great city of Alexandria, home first five weeks of the expedition, the team managed to locate year period, some amazing discoveries have been made. In the waters at the mouth of the mighty Nile. And there, over a 16- life.” And that is something that is way beyond price. slums teaches discipline, teamwork and persistence part of the benefit. Learning a musical instrument, Hilti said, school dropout rates and a decline in crime. But that is only one Sistema brings benefits worth $1.68 in the form of a falloff in porters, and schools known as El Sistema. respect for the founder’s son is very evident. Intheory,respect forthefounder’ssonisveryevident. there is ariskthatsuchcommitmentcouldturnthecultureinto theindividualintooptimalcareeropportunities.”ities of people aroundtheheadquartersinSchaan,Lichtenstein, to eachotherbyamutualfondness forweepingandcord- than 1,000 engineersand spendsover170millionSwiss dressed in the distinctive red of thecompany’slogo,dressed inthedistinctiveredof and their dividuals. whereitemploysmore Research anddevelopment, less powertools. cult ees’ considerable dedication to the firm. There are plenty of There areplentyof ees’ considerablededicationtothefirm. out onajourney, “to asthecompany putsit, translatetheabil- — Another venture that is particularly close to Michael Hilti’s For Later, the two men turned their attention to the coastal The Inter-American Development Bank is among its sup- In practice,thecompanyurgently needspeopletobein- Commitment, Hilti’sCommitment, fourthvalue,showsinitsemploy- — a sort of sect(“thea sortof Hiltis”?) whosemembersaredrawn having calculated that every dollar invested in El name is derived from the Egyptian for “golden floor,” a Goddio and his team of divers, clad in suits of Hilti red have become involved in a program of music teaching — as many as 90 percent of them from grim The Korn/ f — “the basics for erry i e T u T i nsT

Credit

Photo: Dave Cruz and Running Shorts.HeusesUnder Thumb Trail. BobiswearingUnder Ferry NorthAmericatakestimeto enjoy thedesertviewsfromTom’s starter orlateafternoonhike. running Armour’s ChargedCottonT-Shirt a conferenceorleadership Bob Damon Heart Ratemonitor withGPSto offers stunningviewsofthe ClienTs WiTh o Armour’s ChetcoTrail shoesfor Four Peaks andCamelBack ultimate traction andaGarmin maintain “peak”performance. be suretocheckoutTom’s Next timeyou’reattending perfect foraquicksunrise Thumb Trail. Thissolitary, three mileroundtriptrail Mountain, makingitjust retreat inScottsdale,AZ, —Michael Distefano , President,Korn/ ur ur

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Pedersen, a fictional young manager interesting... at a giant global publishing company, HUSH MONEY Hed tk who has just been promoted and is Among parents with at least $3M USD in investable assets, tasked with building the company’s 52% have not fully disclosed the extent dek tk resonate dramatically with readers online course offerings into a profit- of their wealth to their children. or fall flat for some who are cynical able business. Hill uses Jason as a An additional 15% have told them about self-help books. graphic example throughout the nothing at all. inda A. Hill has been teaching The main idea Hill shares is that book of a neophyte manager smack- Source: U.S. Trust leadership courses at Harvard Busi- good managers are not born but ing headlong into the complexities ness School for nearly three decades. made, through trial by fire. When a of managing a successful team in a During that span, she has had a company promotes someone into global, diverse organization. chance to examine the daunting set management, the assumption is that It is not always clear how rele- Lof challenges that face both novice this person will rise to the occasion, vant the fictional case study is, but and experienced managers as they grow consistently into a wise and ef- given that Harvard Business School climb the corporate ladder. Having fective boss and move up through is built on the case study method, it studied and taught about how people the organization. Of course, the real- is not surprising that Hill relies on it. learn to lead and manage through ity is that the ground underneath She is at her best when she addresses where you’re going?” Hill wrote. cisions in conscious pursuit of some difficult career transformations, that proverbial ladder is littered with the subtle but powerful elements of “Have you defined and communi- longer-term goal. They just respond Hill has written extensively about bodies of failed managers who were managing that are often lost in the cated the future you want and the as best they can, moment to moment, the pragmatic moves young manag- unable to transform themselves into daily tidal waves of work. A reader steps that will take you there? It’s im- problem to problem, to keep the ers must make in order to become true leaders. And toward the top are will gain valuable insight from the portant to do this. Yet many manag- work flowing.” successful leaders. Her 2003 book, exemplars of the famed Peter Princi- chapter, “Define the Future.” ers say they’re simply carried along If this sounds like your life, “Be- “Becoming a Manager: How New ment, you will find that “Being the ple, which holds that managers inev- “Do you and your group know by events. They don’t act or make de- ing the Boss” is well worth the read. Managers Master the Challenges of Boss” is a well-written, comprehen- itably rise to their level of incompe- Leadership,” was a well-received sive guide to finding ways to succeed tence. Managing is hard and most discourse on the early-stage require- on this often perilous journey. young professionals, especially in to- ments of being a new manager. Hill begins with several funda- day’s high-pressure global environ- In a 2010 interview with Inc. mental questions: Are you as good a ment, have little more than intuition magazine, Hill noted that as a busi- manager as you need to be? Have you to guide them. Hed holds all the above credentials, ness professor, “I know that power truly mastered the fundamentals of “Management is responsibility gained a unique perch in the main- can corrupt, but I think powerless- being a boss? Do you know how to for the performance of a group of Tk stream media when he began writ- ness corrupts even more. Anything I get the best possible performance people,” Hill stated at the outset. Why ing his “Corner Office” column in can do to help people feel more pow- from the people who work for you? is such a simple idea so difficult to Dek tk the Sunday Times in early 2009. In a erful so that they can actually give Are you ready for increased leader- execute? “To carry out this responsi- dek tk short time, he amassed an impres- voice to their values and contribute ship responsibility? Are you good bility, you must influence others, sive list of interviews with the likes to their organizations and society — enough to achieve your career aspi- which means you must make a dif- of Steve Ballmer of Microsoft, Brian that makes me happy.” rations? Or have you stopped mak- ference not only in what they do but Connecting with a lineup of Dunn of Best Buy, Jeffrey Katzenberg In her new book, “Being the ing progress? in the thoughts and feelings that some of the business world’s top of DreamWorks Animation, Robert Boss: The 3 Imperatives for Becoming The primer is divided into three drive their actions.” leaders is easier if you are the deputy A. Iger of Disney, James E. Rogers of a Great Leader” (Harvard Business main sections, each devoted to one For Hill, the goal is to offer not national editor of The New York Duke Energy, Alan Mulally of Ford Review Press, 2011), which she wrote of the three imperatives: manage so much a template as a comprehen- Times, the lead editor for the team Motor Company and many more, with Kent L. Lineback, also the au- yourself, manage your network and sive self-learning guide for managers Cthat won the 2010 national reporting both household names and obscure thor of “The Monk and the Riddle,” manage your team. Within those to execute a winning transformation Pulitzer Prize and author of a regular but successful chief executives. And Hill sets out to offer the next natural sections are detailed subsections for themselves and for the organiza- column in the Sunday Times busi- Bryant’s interviews — offered up in a stage primer for her target readers: that drill down into the essence of tion. In this regard, “Being the Boss” ness section. Those credentials will question and answer format on page individuals in early and midcareer each imperative and a self-test for is a good, old-fashioned how-to book definitely open doors to the CEO and leadership philosophies is an- 2 of the business section — moved management positions. If you have readers to evaluate their own perfor- overlaid with 21st century organiza- suite, but getting these driven execu- other matter entirely. beyond conversations about quar- thrown caution to the wind and ac- mances in these situations. This tional realities. To illustrate her tives to drop their defenses and Adam Bryant, the veteran New terly results and theoretical aca-

tually leaped into the fray of manage- “MBA in a book” concept will either point, Hill introduces us to Jason Hal Mayforth share their own personal life lessons York Times business journalist who demic business dogma into the heart

Q4.2011 The Korn/f erry i nsT i T u T e Briefings on TalenT & l eadership Q4.2011 68 Rifkin_in_review_beingtheboss_LC_6_5_11.doc Rifkin_in_review_corneroffice_lc_6_5_11.doc 69 i n reVV iew

of that powerful but ambiguous nies that engage them deeply will game works, right? It’s feedback. And realm known as management and win the battle for talent.” then eventually you beat it. As it leadership. Likening himself to a dinner- turns out, the most fun parts of that One cannot conduct so many of party host, Bryant sets his book out game are when you’re losing. When these interviews without identifying as a conversation in which leaders let you finally beat it there’s a moment patterns and commonalities be- their guards down and share the sto- of euphoria, but then it’s over. tween executives’ emotional and ries and lessons that shaped their ca- Maybe it’s because I grew up in that practical agendas. So Bryant has com- reers and brought them into the cor- generation and I have the ability to piled these insights into a new book ner office. The book is broken down take chances, which leads to the abil- not surprisingly entitled, “The Cor- into three main sections: Succeeding, ity to innovate and try new things. ner Office: Indispensable and Unex- Managing and Leading. Within These are important life lessons that pected Lessons From CEOs on How those sections are chapter headings came along.” to Lead and Succeed” (Times Books, — “Passionate Curiosity,” “Smart In- From Carol Bartz, CEO of Yahoo, 2011). The book, based on interviews terviewing,” “Small Gestures, Big Bryant received schooling in the art with more than 70 CEOs and high- Payoffs” and the like — which serve of career building. Bartz suggested ranking executives conducted in as table settings for the colorful quilt that a pyramid is far more appropri- 2009 and 2010, is not simply a collec- of anecdotes that Bryant has gath- ate than a ladder as a metaphor for a tion of his interviews but rather a ered from his interviews. career journey. distillation of the lessons drawn For example, in the chapter “Bat- “I wasn’t given this advice, but from the real-world experiences of tle-Hardened Confidence,” Bryant in- this is what happened in my life,” his subjects. troduces Jen-Hsun Huang, the co- Bartz told Bryant. “You need to build “My goal is not only to offer a founder and CEO of Nvidia, the visual your career not as a ladder but as a new story line about CEOs as manag- computing company, who explained pyramid. You need to have a base of ers but also to provide some back-to- his unwavering self-confidence. experience because it’s a much more basics help for managers at all levels “I’ve never beaten myself up stable structure. Think about it. If of business, particularly since so about mistakes,” Huang said. “When you’ve done a lot of different jobs, many of the grand notions about I try something and it doesn’t turn you’ve a platform to go up, however AD transformative business practices out, I go back and try it again, and high it is you want to go. What that have failed to live up to their billing maybe it’s because I grew up in the involves is taking lateral moves, and amid the rubble of the busted econ- video-game era. Most of the time it involved getting out of your com- omy,” Bryant wrote. “Employees when you’re playing a game you’re fort zone.” Bartz dismissed the busi- have higher expectations of their losing. You lose and lose and lose un- ness school trajectory model of mov- employers now, too, and the compa- til you beat it. That’s kind of how the ing ever upward as a sign of success. “That’s not how it works,” she de- interesting... clared. “Go find out how companies run.” NO TIME FOR A SIESTA In the end, Bryant’s book, well Mexicans work an average written and a quick read, butts up of 10 hours a day, the against the usual conundrum for most of 29 industrialized nations studied. Belgians, most prescriptive business books: at the opposite end of the now that you have read all this, what spectrum, work 7 hours is the definition of leadership and daily. The average is 8 hours. how do I, the reader, make it work Source: Organization for Economic for me? “People learn to lead through Co-operation and Development experience; there really are no short- cuts,” Bryant wrote, stating the obvi- ous. But one can never have too many good war stories to share along the way.

70 Q4.2011 The Korn/f erry i nsT i T u T e 72 thoughts Partingparting t houghts Tk, Q4.2011 K t Tk. Tk. tk. by JoelKurtzman The Korn/ f erry i e T u T i nsT

Robert Risko Tim Hindle is founder of the London-based business language consul- Michael Hiltibelievesthatitsstructureandrulescanun- receptionist beforebecomingasalesagentandthenproduct Risberg, isaSwedewithanengineeringdegreefromCanada manager. “Hilti,”shesaid,“made itpossibleformetohavea right peopleonthebusinseatsdoing running alargeorganization,andtherightpersonalqualities. thefamily. thecompanyfromthoseof rate theinterestsof mains afamilyfirm.Ithadshortflirtationwithpublicmar- francs ayear, isabsolutelyvitaltothecompany’sfuturesuc- worship. Employeesarefreetoleaveatanytime and an M.B.A. fromabusinessschoolinSwitzerland. and anM.B.A. and informationtechnology. executive,Bo currentchief The valley to all four corners of theearth. valley toallfourcornersof HILTI OVERMATTER: production control,beforemovingbacktoSwitzerlandfora before moving onto the executive board in charge of finance before movingontotheexecutiveboardinchargeof become privateagain,withthefamilytrustbuyingbackall board. Meanwhile,though,thesunisstillshiningbrightlyon the companybutalsoOCJcamps. the listedshares. the littleredboxesthathavespreadfromonesmallAlpine things forHilti” oncethereisnolongerafamilymember on the rightqualifications, provenloyalty, asuccessfulrecordin kets: nonvotingshareswerequotedontheZurichStockEx- low, whoworksforthecompanyinSouthAfrica,startedasa derpin the company’s future well beyond the demise of the derpin thecompany’sfuturewellbeyonddemiseof last familyemployee.Forinstance,itdecreesthatnoone,re- ual careers. There isnocleartrajectorytothetop.ual careers. SimoneBar- There gardless of surname,getstorisewithinthecompanywithout gardless of career.” cess. mindlessguru Andinnovationdoesnotcomeoutof change from1986to2003. thecompanychoseto Then, sales job. hewenttomanageanoperationinGermany Then, years and was editor of EuroBusiness in the 1990s. tancy Working Words. He was a contributor to The Economist for 25 Moreover, themfollowunconventionalindivid- manyof Time alonecantellwhetherthatisenoughto“get the HiltiFamilyTrustThe wasformedinthe1980stosepa- For allitsglobalaspirations, however, thecompanyre- One seniorexecutiveworkedintheUnitedStates, in

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Megatrends DuPont bets on DuPont bets on Ellen Kuhlman Q4.2011 the Future Embracing Sustainability The Trouble with The Trouble Where Are All the Italian Women? Selling Stuff on Facebook How Hilti Promotes its Culture germany, master of exports of master germany,

the korn/ferry institute briefings on talent & leadership issue 8 Q4. 2011

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