THE POWER of AGILITY 2017 the New Panamera Sport Turismo

KORN FERRY BRIEFINGS TALENT + LEADERSHIP HIRING: HOW 70 IS THE NEW 50

ARE YOU WORTH IT? OUR NEW SALARY DATA VOLUME 8 Best in class? Only in class. THE POWER OF AGILITY 2017 The new Panamera Sport Turismo.

The Panamera provides its own benchmark. As a Sport Turismo it is now in a

class of its own. With powerful engines delivering up to 404 kW (550 hp). And Making Change Stick

a design that sets standards of its own. Built for people who go their own way:

www.porsche.com/PanameraSportTurismo

NO. 31

Fuel consumption (in l/100 km) combined 2.5; CO2 emissions combined 56 g/km; electricity consumption (combined in kWh/100 km) 15.9 $14.95 US / CAN

AZ_Panamera_G2_ST_Kornferry_210x273mm_EN_DU21042017.indd 1 21.04.17 08:43 UP. IT’S WHERE BUSINESS AND TALENT STRATEGY ARE IN PERFECT HARMONY.

Putting organization design into action requires the right people, in the right roles, engaged and enabled to do the right things. We align your talent and business strategies to create an organizational structure that matches your ambitions. So you can drive the performance of your organization – and all of your people – UP.

Learn more at kornferry.com/up UP. IT’S WHERE BUSINESS AND TALENT STRATEGY ARE IN PERFECT HARMONY.

Learn more at kornferry.com/up Gary Burnison Thought leadership. Timely insights. And more. Chief Executive Officer

kornferryinstitute.com Michael Distefano Chief Marketing Officer & President, Korn Ferry Institute

Jonathan Dahl The DS Movement Editor-in-Chief Digital sustainability is a hot topic—the ability of organizations to handle today’s constant state Russell Pearlman of high-tech change. See our yearlong series Managing Editor that focuses on key leadership skills and the Nancy Wong Bryan industries (including a surprising one) that are Copy Editor leading the way. Amy Roberts Copy Editor

Forecasting Talent Cutting-edge firms are focusing on talent who not only do the current work but can grow to Creative Directors take on higher-level assignments of the future. Robert Ross Roland K Madrid See the latest update to our “Talent Forecast”

series. Art & Production Daniel Botero Mary Franz

Marketing & Circulation Manager Driving Innovation in Detroit Stacy Levyn Rozen We chatted with Jim Hackett, CEO of Ford Project Manager Smart Mobility, who’s helping merge the worlds Tiffany Sledzianowski of car and tech geeks to develop innovative tech Digital Marketing Manager products in the automotive industry. Edward McLaurin

Marketing Coordinator Naz Taghavi

PLUS

VIDEO: Cashman Consults Contributing Editors Lexie Barker A lot of bosses can have great strategies, but can they motivate David Berreby the troops? In this video series, Kevin Cashman, senior client Simon Constable partner of Korn Ferry’s CEO and Executive Development practice, Martin Coyne describes the importance of storytelling and creating a common sense of purpose. Patricia Crisafulli William J. Holstein Karen Kane Doron Levin Christopher O’Dea Glenn Rifkin P.J. O’Rourke Shannon Sims Meghan Walsh Peter Zheutlin

2 Briefings On Talent & Leadership

“Everyone thinks of changing humanity, and no one thinks

—Leo Tolstoy, 1900 CONTENTS of changing himself.”

COVER STORY

Agility: The Power to Make Change Stick / 30 Executives have great ideas, but all too often they never get executed. How a key skill set helps leaders pull off change.

By Russell Pearlman Cover and story illustrations by Peter Crowther

4 Briefings On Talent & Leadership FEATURES ON THE HORIZON

Beware LATEST THINKING / 9 of Being Global experts offer some bold advice of their Bored / 40 own for Trump’s second hundred days.

What will we do when artificial intelligence TALENT SHOW / 12 takes away the need Car firms are risking billions to find the best to think on the job? talent for creating driverless cars.

By David Berreby ON THE BOARD / 14 Directors are under pressure to serve on fewer boards, but not all agree.

HIRING LINES / 16 How stock exchanges are reinventing themselves—and their leaders.

HISTORY LESSONS / 18 The Tech’s first great entrepreneur had one great flaw. Over-70 Crowd / 48 MONEY TALKS / 20 Are you worth it? A revealing look at how A new age barrier C-suite pay measures up. for hiring is broken, but how well can this group work with millennials? COLUMNS DOWNTIME By Meghan Walsh

GADGETS / 65 THE GLOBAL The BlackBerry ECONOMY / 22 Underground Simon Constable DINING / 68 The Cheesy Business Lunch ASIA Educating MARKETS / 24 the B-School Ling of Tomorrow / 56 Li

Kellogg’s Dean Sally Blount is trying to reinvent manage- EMOTIONAL ment education as INTELLIGENCE / 26 READING LIST / 70 we know it. Daniel Summer Reads, By Jonathan Dahl Goleman Summer Insights

PLUS FROM THE CEO / 6 Gary Burnison ENDGAME / 72 Jonathan Dahl “The talented few “Sales as an important don’t just have jobs, skill set just they have purpose; keeps moving off everyone’s radar.” By Russell Pearlman they radiate Cover and story illustrations by Peter Crowther passion.”

Issue No. 31 5 FROM THE CEO

The One That Got Away

BY GARY BURNISON

was early fall, and all around a valley, towering trees shone as the bright sun The talented radiated the magnificent colors of their few don’t just leaves—hues of burgundy, yellow and red filled the crisp sky. have jobs, they A fishermanI t stood thigh-deep in the river, casting into the current. All around him—even bumping into have purpose; they the heavy waders he wore—were salmon following radiate passion... the instinctive urge to swim upstream. The river was thick with them, moving as one speckled mass in the they are incredibly salmon run that happens this time of year. agile around the Then, suddenly, one fish broke the surface. It made a perfect arc in the air, strong and nimble even new and different, while out of its element. This “flying fish” caught the sunshine, the scales on its back shiny and iridescent. and willingly The fisherman watched in amazement, caught up become fish out in the beauty of this outlier. Then a persistent tug on his line captured his of water who attention. One member of the swimming mass had taken the bait, entrapped by its complacency thrust themselves to follow the fins and tails ahead of it. This salmon into unfamiliar now on the hook had opened its mouth at the wrong time, thus ending its journey—cut short before the environments. destination was in sight. But not so for the flying salmon that had refused further upstream. That salmon would be one of the to stay with the rest. Some impulse had sent it sky- few that made it, surpassing all the rest. ward, bucking against the normalcy and rigidity of A quote from Norman Maclean, author of “A the salmon run. River Runs Through It,” echoed in the fisherman’s That salmon, the fisherman thought, would be brain: “Nobody who did not know how to fish would the one to avoid the hooks and nets and hungry bears be allowed to disgrace a fish by catching him.” This

6 Briefings On Talent & Leadership extraordinary fish, borne of air and water, would who thrust themselves into unfamiliar environments. never be disgraced by being caught—even by a Insatiably curious about what is around the next skilled fisherman. bend, they balance past experiences with first-time Reeling in his line, the fisherman netted the salmon challenges. They don’t shy from the rapids or the from the stream and examined it. How ordinary this shoals, nor do they avoid the deep waters where few fish looked—just one of the many, indistinguishable go. They don’t just cope with change, they welcome from the rest. He carefully untangled the fish and and even instigate it. They are the innovators and placed it back in the stream to be with all the rest. disrupters who aren’t caught up in the ordinary. It lacked all the spec- tacular agility of the one that had leaped out of the water and into the air. The fisherman smiled to himself, grateful to have caught a glimpse of such a magnificent example of the one that got away. The fisherman was also a CEO. In his day job, he stood in another stream, often surrounded by people who are content to stay where they are. They do what’s expected, but just enough. They play it safe and never go beyond what’s expected, head down, simply following the ones in front. They are the 80 percent who accomplish the 20 percent. They go with the flow, What about you? Do you have purpose and but are soon “hooked” by their own disengagement. passion in what you do? Or do you simply swim They get entangled in the nets of complacency. with the stream hoping to be recognized with the Today, it seems, for all too many, it’s 5 p.m. not only countless same? somewhere, but everywhere. Rockets didn’t take us to the moon, innovators Then, there are the outliers—the 20 percent did. Transformation isn’t the result of a machine, who accomplish the 80 percent—who have the it’s the result of a dreamer. hustle and the hunger that allow them to rise above Find passion in your job. When you do, you will the rest. If only those qualities could be taught to be flying when all the rest are only swimming.• the others! CEOs will hire hunger and hustle over pedigree any day. The talented few don’t just have jobs, they have purpose; they radiate passion. Especially people who are diverse in thought, experiences and backgrounds—they are incredibly agile around the new

Artwork Kraus by: Jon and different, and willingly become fish out of water

Issue No. 31 7 Honeywell is building a smarter, Connected aircraft Connected automobiles safer, more sustainable world Connected homes Connected buildings That’s the Power of Connected Connected plant That’s the Power of Honeywell Connected supply chain Connected worker

THE POWER OF CONNECTED

BY SHANNON SIMS

With a note of caution, global experts offer their advice to the White House.

The Second Hundred Days: Now It Gets Interesting

ustralia would love to see a solid framework for global order. Europeans want more cooperation on the digital economy. And in South America, one expert would like President Trump to pay some attention to Brazil—and vacation there.

The new administration certainly can’t be accused hundred and beyond takes on greater importance. of making the first hundred days in office boring. But “It will take a while for Trump to get his team into while Supreme Court picks and border walls keeps place and to get the agenda set,” says Andrew Tabler, pundits and the populace entranced at home, the a fellow in Arab politics at The Washington Institute rest of the world tends to have a broader perspective. for Near East Policy. Sure, much of what has occurred in the president’s But when the president does, what do experts first hundred days in office has many international on global affairs—from Paris to Perth—think the

Artwork by: Neil Webb leaders nervous, but many experts think the second White House should do?

Issue No. 31 9 O N T H E HORIZON THE LATEST THINKING

One word: Cooperation.

The New Digital Economy: The biggest issue of the day, says Dessertine, is the “very big switch in global economic models,” from a focus on industry growth and protectionism to now “technologies and digitalization.” Businesses need time to adjust, so the U.S. should adopt a “policy of cooperation” to help with the transition.

International Monetary Policy: Dessertine also believes there is a need for the creation of a “framework around the financial economy.” Much like right after World War II, when there was a cooperative effort to rebuild, “we have a moment now where we need to have new global cooperation for financial and Philippe Dessertine monetary policy.” Without one, he doesn’t believe it will be possible, for example, Professor, Sorbonne for decisions to be made on interest-rate policies or to avoid currency wars. Graduate Business School, University of Paris, Pantheón Sorbonne Russia: Dessertine says that “almost every day there are incidents along the borders” of Russia and Europe. This military tension, he says, is a sign of Russia testing the Western world. “So when there is a possibility of discussions going on between the Russian and U.S. presidents, that is a big danger in Europe,” he says.

The world wants to know the new U.S. administration’s policies on trade, energy and diplomacy.

Watch for a shift with Iran and pro-business policies.

ISIS and Iran: Tabler believes Trump will prioritize fighting ISIS in Syria and Iraq in the second hundred days, along with a move to combat other extremist groups in the region, such as Al Qaeda affiliates. That focus, he says, will create key policy changes that could impact countries from Tunisia to Turkey. Another key issue to watch: Iran and nuclear weapons. “I don’t think Iran is going to get the same kid-gloves treatment it has received under Obama,” predicts Tabler. He even says it may be possible that Iran could be more interested in dealing with Trump than they were with Obama.

Energy: The pro-business Trump administration should ensure that business Andrew Tabler continues as usual, Tabler says. Still, U.S. energy policy will have a huge impact Fellow in the Program on Arab Politics, on the region. Expanding domestic oil production would make the already low The Washington Institute for Near East Policy price of oil go even lower. That, in turn, could aggravate the Arab Gulf countries, and bring into question to what degree the U.S. is allied with Qatar and Saudi Arabia on the question of oil.

10 Briefings On Talent & Leadership Make us a priority. Don’t annoy our biggest partner. Pedro Spadale Undersecretary for International Relations, Melissa Conley Tyler State of Rio de Janeiro National Executive Director, Australian Institute of International Affairs

Foreign Direct Investment: For Latin America, and the Brazilian state of Rio de Janeiro, business with the U.S. is critical. “The U.S. is the principal economic partner of Rio de Janeiro State,” points out Spadale. Even Alliances: Once friendly, Australia-U.S. with its troubled economy, Rio still attracts $80 billion relations took a hit the moment President Trump in foreign direct investment, with most of that coming and Australian Prime Minister Malcolm Turnbull from the U.S.—so Spadale is hoping Trump addresses had that first controversial phone call. “Trump’s U.S. business policy there ASAP. presidency has brought great uncertainty to the relationship,” says Conley Tyler. But the biggest Trade: Concerned about possible trade restrictions, issue for Australia is actually over its biggest Spadale hopes Trump will organize a meeting between business partner, China. “A trade war between Brazilian commercial leaders and U.S. policymakers to the U.S. and China would be catastrophic,” she discuss priorities for the region. “The priorities of the says. Any open conflict is a “nightmare scenario U.S. right now are more focused on other regions, and for Australia,” and exactly the sort of second- the U.S. has not really designed a proper plan for its hundred-day development the country will be relationship with Brazil,” he says. “working to avoid with whatever influence it has.”

Tourism: Spadale also hopes that Trump builds on Rules of Engagement: “As a middle Rio’s Olympic moment to help increase tourism to power—as our foreign secretary described it, a the city, where Trump has already invested in hotels. country that can neither bully nor bribe to get “It would be great for him to come down here for a its way—Australia relies on a framework of rules weekend holiday,” he says. and institutions for global order,” says Conley Tyler. If the United States’ post-World War II support for this order can no longer be taken for Beware of granted, “Australia faces a harder road.” protectionist policies. Trade: If U.S.-China relations become “more confrontational” via hawkish policies put in place in the second hundred days, business as usual between Asia and the U.S. will be harder to maintain, says Wan Saiful, who is based in Malaysia. “There will come a time when we will have to take sides,” he says. “If the U.S. does become more protectionist, it is going to be a very new dynamic for us here.”

Restrictions on Muslims: Wan Saiful says Trump’s controversial policies around Muslims entering the U.S. may have a direct impact on the future business community in Asia. Malaysia—home to 20 million Muslims—sends thousands of students to study in the U.S. each year, some of whom return years later to the C-suites back home. Wan Saiful Wan Saiful Wan Jan Chief Executive, Institute for notes that new Trump administration policies could mean that Chinese Democracy and Economic Affairs students, many of whom are not Muslim, may gain a competitive advantage via their ability to study in the U.S. if their Muslim Malaysian counterparts cannot. •

Issue No. 31 11 O N T H E HORIZON TALENT SHOW

BY DORON LEVIN The Human Talent War Steering Driverless Cars

Car firms are spending billions on experts who can develop the right technology.

t testing facilities Call it the new battleground for does research at the Ohio State around the world, talent—one of the biggest ever. University. “Automakers and global powers are By some estimates, the auto other employers are ready to hire racing to find the industry has spent $3 billion to whomever they can educate.” Aengineering breakthrough. $5 billion just to lock up the top Toyota alone is spending They’re throwing thousands of tech performers in the driver- $1 billion to build a staff of 200 scientists at the problem, some- less space. That doesn’t count and create a research institute times plucking them right out of the hundreds of millions more focused on driverless tech. Uber hallowed academia, other times that technology firms big and recruited about 50 Carnegie enticing them from rivals with small are spending on their own Mellon University professors and offers of money or power. There engineers to take the lead in the grad students to join its research are even allegations of stealing race to succeed first. In demand: center for self-driving vehicles, top-secret technology. The stakes couldn’t be higher as solving the Call it the new problem could well change the course of human history. battleground for talent— Or at least drive it in the right direction, as instead of a one of the biggest ever. Cold War-era race to develop the atom bomb, this human drama is the know-how to code software not far from campus, and over the development of a more and write algorithms so a vehicle later announced a $40 million utilitarian offering: the driverless can drive on its own safely on partnership with CMU to help car. Indeed, with nearly everyone any road and in any weather. ensure access to future talent. acknowledging it’s only a matter That skill narrows the field to Engineers at auto-parts manu- of time before the roads will be small group of highly qualified facturer Bosch spent 1,400 hours full of autonomous vehicles, computer scientists, software and $225,000 just to make two carmakers and tech firms alike are engineers and roboticists. Tesla sedans fully autonomous. spending billions to come out with “The expertise in software (Bosch says it has around 2,000 the right technology. And for the and artificial intelligence appli- engineers devoted to driver- most part, the money isn’t going cable to driverless technology is assistance technology, of which to parts or engines, but almost in extremely short supply,” says driverless vehicles are a part.) entirely toward attracting top- Carla J. Bailo, a former Nissan The effort, of course, makes notch PhDs and software wizards. research executive who now sense, given how valuable the

12 Briefings On Talent & Leadership CULTURE SHOCK: STEPS TO MERGE TECHIES WITH AUTO EXECUTIVES

Create a common purpose. “Let’s reinvent transpor- tation” can appeal to forward-thinking leaders of all backgrounds.

Rethink design together. Software upgrades come early and often; car upgrades don’t. Get auto and tech teams to marry the two methodologies.

Highlight the similarities. Experts say the difference between an engineer who builds a car and one who builds a robot isn’t as great as each might think.

driverless car market may be unwind the DNA strains between together on a project of this scale— someday. With more than 80 mil- the two sectors … I mean, wow, and that’s before even discussing lion traditional vehicles sold each are they different,” says Brad how to convince a Californian to year worldwide, even with a mod- Marion, senior client partner in spend winters in Michigan. “How est ratio of these new vehicles on Korn Ferry’s Automotive practice. you blend those together is really a the road, autonomous technology As Marion points out, the unique challenge,” says Marion. could be a $42 billion market in car industry is steeped in risk For now, of course, there are 2025, according to the Boston avoidance—given that safety is no easy answers. In some cases, Consulting Group. But with big paramount in the business and carmakers have essentially payoffs come big risks. There is no that developing new models and bought start-up tech firms guarantee that even the greatest wholesale and turned them into minds will produce a driverless 5 questions with James separately run joint ventures, car that the public is fully con- Hackett, chairman of Ford allowing the younger firm to fident using. And if they do, the Motor Co.’s Smart Mobility unit. keep its own high-paced culture. developer of a good but second- See kornferryinstitute.com Others are offering executives best technology could be forced investment stakes in the projects. to write off its whole effort. engines can typically take years Either way, as techies will tell On the talent end, there is and require enormous capital. In you, it’s great to be in demand. also the serious matter of try- contrast, of course, taking chances “Software engineers are looking ing to merge two very different and throwing money at projects for the potential to do something worlds together, the best of in hopes of quick returns is a way unique or make a huge payday,” Detroit with the best of Silicon of life in the tech world. Rarely says Sam Abuelsamid, senior Valley. “If you were going to have cultures been forced to mesh analyst for Navigant Research. •

Issue No. 31 13 O N T H E HORIZON ON THE BOARD

BY KAREN KANE Are Board Directors Going Overboard?

Directors are under pressure to serve on fewer boards, but not all agree.

t was big news—sort of. crisis. Board chairs are putting in talented people who are on four Two of the largest proxy the most hours, more than 290 or five boards.” He adds that advisory firms announced hours, on average. recommending a director who is they wouldn’t recommend The advisory firms’ move already on two or three boards Idirectors who serve on too many came even though at least one to take on an additional one is boards. But when it came right of their own surveys suggested very difficult, although many down to it, the change was a investors would prefer that each clients themselves would also be matter of one seat. company continue to set its own reticent about an overboarded They call it “overboarding,” policies. Indeed, many board director. and the proxy advisory firms pros argue that overboarding For her part, Cynthia Jamison, said they would only recommend depends very much on the task of who has been serving on boards directors who serve on no more the director at each board, point- for more than 15 years, believes than five boards, instead of six. ing out that directors who serve that four can work well for some. (The firms have limits on CEOs on several boards can share their “I consider myself a full-time serving on boards, too, but only expertise—and experiences on working board member,” says one firm changed its figure from boards—across more companies. Jamison, who recently joined the three to two seats.) As small as the change was, it put the spot- light on a touchy—and surpris- “How do you ingly complex—topic. Certainly, serving as a director measure a director’s has become much more of a time sap in the years since the financial crisis and the megaregulations effectiveness?” of Dodd-Frank. According to “How do you measure a board at Darden Restaurants, the National Association of director’s effectiveness?” asks her fourth board. She says that Corporate Directors, board Victor Arias, senior client number is fine if you’re working directors are averaging almost partner for Korn Ferry’s CEO full-time at it. “To try to balance 250 hours per year per company, and Board Services practice more than two with a full-time up 18 percent from just before and global leader of Diversity job is very difficult,” she says. the infamous Lehman Brothers and Inclusion. “Some direc- Lois Scott, a director at collapse in 2008 that marked the tors max out at one. At the MBIA, Chicago Stock Exchange, beginning of the global financial same time, there are some very the Federal Home Loan Bank

14 Briefings On Talent & Leadership

Time Spent Serving on Boards

Hours per year on board responsibilities*

2008-2009* 2015-2016 210 248.2 of Chicago and many nonprofit hours hours boards, argues directors serving per year per year on only one board may be less per board per board effective. It can give you greater perspective to serve on multiple *Conducted in mid-2008, before the collapse of Lehman, etc.) boards, she says. “What I experience with one board can often inform my work with other boards. Breakdown of director time spent Serving on a couple of boards on board-related activities:** brings greater industry and economic knowledge to each board.” 72.8 60.7 Indeed, directors say they tend hours hours to see trends when they serve on Attending Reviewing board and reports and more than one board. They might committee other materials take lessons from a presentation meetings on cybersecurity at one board education meeting to other boards without any confidentially breach. “It’s just good learning and very helpful,” says Jamison. The pay scale for boards hasn’t shifted quite as much as the hours. In a report last fall, Korn Ferry 38.4 29.7 18.7 7.8 20.4 found that annual retainers remain hours hours hours hours hours Traveling Informal Director Representing Other at around $100,000 on average. to/from meetings or education the company Total compensation can be double board events conversations at public with events when long-term incentives and management meeting and special committee **From the 2015-2016 Public Company Governance Survey by the National Association fees are tacked on, but again, no of Corporate Directors. major difference from the prior year. The last increase? 2014. Average Director Time Commitment by Role** Money, of course, is rarely the motivating factor in serving on boards, no matter how many a director sits on. For his part, Arias says the solution to the numbers game may just be matter of chair swapping. “Sometimes we offer Nominating/ up the possibility of a director to Audit Compensation Governance trade out their current board for a Board Lead Committee Committee Committee Chair Director Chair Chair Chair Other new one in order to avoid an over- 292.1 250.5 252.4 249.9 249.2 226.3 Artwork by: John Devole boarded situation,” he says. • hours hours hours hours hours hours

Issue No. 31 15 O N T H E HORIZON HIRING LINES

BY CHANA SCHOENBERGER The Restocking of Global Stock Exchanges

The big exchanges—and their leaders—had to get creative when investors found other ways to trade.

ou Eccleston had never droves over the years because opened. At the New York Stock worked for a stock alternative marketplaces were Exchange alone, the exchange’s exchange when he now available. Eccleston knew market share of U.S. stocks became the CEO of one TMX needed a new strategy—and plunged from 70 percent in the Lin 2014, but he didn’t need any a new attitude. “The company 1990s to about 20 percent now, specific experience to know the viewed itself as the place you had forcing the NYSE into two merg- business had problems. to do business, not a place you ers between 2007 and 2013. For four straight years, wanted to do business,” he says. Such mergers, of course, were organic revenues and profitability It’s ironic that, as stock prices one way to deal with the issue, had fallen at TMX, Eccleston’s soared after the Great Recession, but in general, stock exchanges new perch and the holding stock exchanges saw their busi- like TMX needed to revamp company for the Toronto Stock ness models implode. But just as their business models—and their Exchange and several other traditional telephone companies talent pipelines—to stay in the Canadian exchanges. Traders and stumbled when cell phones and game. “They’re trying to look at investors alike, long forced to buy e-mail came around, exchanges the assets they have and find new and sell securities through public lost their dominant grip on ways to get money out of them,”

exchanges, had been leaving in traders as new trading networks says Steve Grob, director of group Artwork Graphics by: Infomen

16 Briefings On Talent & Leadership strategy at Fidessa Group PLC, a themselves. At the London he built out a new strategy for trading infrastructure company in Stock Exchange, the percent of TMX, expanding market data and London. Such redesigns, he says, managers with experience in analytics offerings, and redesign- were the culmination of a trend information systems shot up to ing the organization to better line that started in the ’90s, when stock more than 40 percent between up with customers and services, exchanges ceased to be clubs run 2002 and 2007, compared to rather than relying solely on ways by members—who were them- just 3 percent between 1996 and to expand the exchange’s trading selves floor traders—and instead offerings. The firm took on 13 became modern companies with senior hires, prioritizing people corporate structures that turned Exchanges who could build businesses over into huge publicly traded firms. floundered those with experience operating And the bigger the exchanges exchanges. He also gave senior got, the more adept innovators even as roles to 20 existing staffers, many became at finding alternatives for of whom were talented but were in people who didn’t want to deal stock prices smaller roles lower in the organi- with mega-exchanges. Banks soared. zation, he says. Eccleston wanted and brokerages set up their own customers and employees to view alternative trading systems and 2000, according to a study in TMX not as a stock exchange, exchanges so that larger clients the Journal of Applied Business but as a technology company could trade big blocks of securi- Research. Managers in product that ran markets. While many ties without the trades moving development with international people did leave, TMX’s business stock prices immediately. Plus, experience went from 3 percent has improved significantly. Since these private exchanges provided to 53 percent. “When you change Eccleston started in November more privacy for institutions strategies that much you have to 2015, TMX’s stock is up 30 percent. that didn’t want their investing then align the leadership with the Still, the exchange and oth- strategies scrutinized. new strategy and in some cases ers like it may continue to find To compete, legacy exchanges change your talent across the change necessary. Grob believes began to adopt new strategies, board,” says Alan Guarino, vice that as the world of raising capital such as selling market data, chairman in Korn Ferry’s CEO and floating initial public offer- licensing their trading software and Board Services practice. ings adjust, so will exchanges— and more merging. They also Eccleston first spent time all the more reason to keep an started retraining or bringing asking customers about their eye on the right people in the in new recruits to reinvent own pressing problems. Then right positions. •

Some legacy stock exchanges have moved away from TRADING TYPES traditional revenue sources, such as transaction and listing OF REVENUE fees, and increased sales of market-insightful data.

PERCENTAGE OF REVENUE FROM MARKET DATA:

LONDON STOCK INTERCONTINENTAL TMX GROUP - EXCHANGE - UK EXCHANGE/ CANADA 33% NYSE - USA 9% 25%

2011 2011 2011

45% 33% 28%

2016 2016 2016

*InterContinental Exchange acquired NYSE in 2013. Source: company reports.

Issue No. 31 17 O N T H E HORIZON HISTORY LESSONS

BY GLENN RIFKIN Tech’s First Great Entrepreneur

Ken Olsen created a giant computer firm but thought PCs were “toys.”

n September 1987, Kenneth H. hardly have imagined at that founder of Forrester Research. Olsen, the founder and CEO instant that in less than five Having received funding from of Digital Equipment Corpo- years he’d be ousted in disgrace Gen. Georges Doriot, the famed ration, stood before several by the board as the company’s venture capital pioneer in Bos- Ithousand customers, employees, fortunes sagged and, six years ton, Olsen built “the first great and reporters to bask in the after that, his company would be venture-backed technology firm,” glow of his company’s triumph. subsumed into Compaq Com- Colony adds. Known throughout the computer puter and later HP. A Calvinist and a scientist, industry as DEC, it was celebrat- Olsen founded DEC with Olsen believed deeply that one ing not only its 30th anniversary $70,000 in seed money in 1957, did the right thing by selling only but also its emergence as the just a few years after graduating the best products to customers hottest company in the technol- with an electrical engineering and that by building the high- ogy industry. Second only to IBM, degree from MIT. He set up shop est quality computers, buyers DEC was a Fortune 50 company in an old Civil War–era wool mill would flock to his doors. He had with more than $12 billion in sales in the tiny blue-collar town of deep disdain for marketing and and 120,000 employees around Maynard, Mass., 20 miles west of advertising and focused instead the world. Boston, and there built one of the on satisfied customers’ word of Having recently been dubbed most admired companies in the mouth to sell his wares. “America’s Most Successful burgeoning technology industry. For about 30 years, Olsen’s Entrepreneur” by Fortune “He was the first great entre- strategy and vision worked to magazine, Olsen clearly enjoyed preneur in the technology busi- perfection. Olsen’s greatest this pinnacle moment. He could ness,” says George Colony, the achievement might have been

Predictions Worth Regretting Ken Olsen’s misjudgment of PCs is one of many prognostications that didn’t pan out.

“Stock prices have reached what looks like a permanently high plateau.” —Yale Professor Irving Fisher in 1929, just before the stock market crash and the Great Depression.

“That’s the most expensive phone in the world and it doesn’t appeal to business customers.”

18 Briefings On Talent & Leadership the open management style he created for the company, provid- ing freedom and responsibility to people and expecting them to exercise it successfully. He fostered an engineering- centric culture in which excel- lence and quality ruled the day, and top engineers clamored to work for DEC. Olsen and DEC effectively created the minicomputer industry. Back in the 1960s, high-end computer power resided only in the hands of Digital Equipment white-jacketed data-processing Corporation’s visionary high priests who controlled the founder, Ken Olsen, corporate mainframe computers. with Bill Gates in 1992. Those mainframes were massive, multimillion-dollar machines and usually made by IBM. So DEC introduced smaller, refusing to lay off employees, even had already chosen IBM as the de cheaper, yet still powerful in difficult economic times. facto standard. Once the industry machines. Its PDP and VAX lines But Olsen, who died at age trendsetter, DEC began to zigzag of minicomputers became so pop- 84 in 2011, ultimately became a while trying to fend off new com- ular—particularly with engineers victim of his myopic view of the petitors and found itself futilely and scientists—that the company industry. He made his fortune chasing new markets. could barely keep up with selling proprietary hardware and Perhaps most damaging, demand. DEC’s fortunes soared software and refused to acknowl- Olsen refused to identify a suc- and Olsen became a wealthy edge the popularity of the Unix cessor, believing nobody could corporate patriarch. A big bear of operating system, which could be run the company but him. As the a man, Olsen was intimidating used by multiple vendors. Olsen technology market shifted, this and sometime cruel. He could referred to Unix as “snake oil.” In visionary was blinded by his own publicly lash out and humiliate the late 1970s, he openly deni- stubborn hold on the past. DEC executives. But he was also deeply grated personal computers, calling couldn’t adapt, even after Olsen’s religious and believed in a fun- them “toys” and saying, “The per- ouster. The once great company, damental responsibility for his sonal computer will fall flat on its the subject of admiring books and employees, whom he considered a face in business.” DEC eventually articles by organizational behav-

Photography by: JPhoto by Pam Berry/The Boston Globe via Getty Images family. DEC became legendary for built its own PCs, but the market iorists, ultimately disappeared. •

“In five years’ time unemployment could go to 15 percent without any difficulty at all in America.” —Richard Branson in 2010. Five years later unemployment was 5 percent. “There is no danger that Titanic will sink.” Phillip Franklin, vice president of the company that produced the ship, in 1912. “That’s the most expensive phone in the world and it doesn’t appeal to business customers.” —Microsoft CEO Steve Ballmer on the iPhone, in 2007.

Issue No. 31 19 O N T H E HORIZON MONEY TALKS

BY PATRICIA CRISAFULLI Are You Worth It?

New data reveals big differences between similar C-suite jobs. How best to mind the gap.

he paycheck certainly up for specific jobs. But many of looked impressive. So the numbers floating on the Web did the new title. But rely heavily on information from after being promoted employees or lack details across THE C-SUITE, to chiefT human resources officer sectors and field. at a large retail chain, Mary Pulling select reward informa- DOLLAR FOR DOLLAR began to wonder how she stacked tion from a pool of 20 million up with other colleagues in the employees, a new Korn Ferry data- How does your comp—or industry. In all, she was earning base takes a different whack at the $435,000 in base, bonus and comp issue—and sheds light on your boss’s comp—stack long-term incentives. Sounds key slots in the C-suite and other great—until you compare her top-level jobs in different indus- up? Relying on its reward compensation package to those tries compared to each other. of others in her field. Called Executive Snapshot, the data, Korn Ferry broke down For as long as there have database reveals salaries for the salary figures for hundreds been companies with people 25th percentile, median and 75th who gossip, workers have found percentile for a single job among of C-suite and top-level jobs ways to get an idea how their executives in the same company pay compares with colleagues in size and industry, along with a for various U.S. companies by their organization. The transpar- breakdown in bonuses and other ency only grew when Internet compensation. The most reveal- size and industry. The figures sites offered some clues on how ing news: the gap among peers. include base salary, bonuses pay outside the firm measured Continued on page 21 and long-term incentives.

20 Briefings On Talent & Leadership or her part, Mary, in our and digitalization. The total Fleit, a senior client partner and hypothetical example, figures are also skewed by leader of Korn Ferry’s Global might expect that her bonuses and long-term incen- Marketing Officers practice. Still, pay stacks up well since tives, where each company’s even that is changing: an indus- she worksF at a fairly large brand. philosophy and strategy also trial company, for example, may But her compensation puts her at come into play. General counsels pay well above the median for only the 25th percentile among in an agribusiness have relatively a CMO to help lead a business CHROs in her industry among small long-term incentive on transformation to become more retailers of similar size. She’s average (as little as 10 percent of customer-centric, Fleit adds. making almost two-thirds the base) compared to, say, the chief In the end, the obvious ques- median ($725,000) and about half operating officer of a professional tion is whether executives can the 75th percentile ($887,000) in services firm, whose incentives leverage all this information to the large-chain retailer category. may match or exceed base salary. boost their pay. What is in their But she’s far from alone. For a Still, imperfections aside, control? “The easiest way to CFO at a large industrial busi- total comp data opens the door grow your salary is to grow your ness unit, pay at the 25th percen- a bit on how companies treat company,” says Bob Wesselkam- tile is almost $750,000 less than pay at the 75th. Some of these differences “Most companies start can of course be explained by with a compensation the complexity of the business and job, as well as the number of philosophy, a point of view direct reports. But many other factors affect C-level pay. For that is comfortable starters, employers often have a for them.” compensation framework that acts as a baseline. “Most compa- C-suite roles whose responsibili- per, global head of Rewards and nies start with a compensation ties vary within the same sector Benefits Solutions, Korn Ferry. philosophy, a point of view that and especially across industries. Interestingly, this approach may is comfortable for them, so they When the chief marketing officer improve not only the extrinsic can pay enough to attract good occupies a traditional marketing rewards, but also the intrinsic talent without overpaying,” role, the compensation gap tends ones—the satisfaction of helping says Scott Kingdom, vice chair- to be narrower: for a mid-sized the company achieve its purpose. man of Korn Ferry and former consumer durables company, Look past monetary rewards head of its Global Industrial total direct compensation at alone, says Nicholas Pearce, practice. Increasingly, loyalty the 25th percentile ($319,000) is clinical associate professor at doesn’t appear to be part of the about two-thirds of the pay at Northwestern University’s Kel- calculation; Kingdom says—and the 75th percentile ($484,000). logg School of Management, and the figures suggest—that long- But in other companies and track “the degree to which your tenured executives who come up industries, the job can carry daily work is aligned with your the ranks into a C-suite position greater commercial responsibili- life’s work and purpose.” tend to be paid less than those ties and higher expectations for Can companies use the data who have moved from company driving revenues. to shortchange employees on to company. “The amount of money paid to pay? Potentially yes, but not To be sure, all salary data- CMOs in retail, technology, finan- likely, say comp pros. “In this, bases have some limits to their cial services and luxury/lifestyle capitalism is brutally efficient,” scope and figures can become businesses tends to be more than Kingdom says. “You cannot outdated quickly—especially in for consumer goods and industrial attract and keep an A player with the age of the global economy products companies,” says Caren B money.” •

Issue No. 31 21 THE C-SUITE, DOLLAR FOR DOLLAR Artwork by: Klaus Meinhardt

Chief Operations Officer

Like CEOs, COOs are paid Chief more at companies Executive with greater size and breadth. From multiple Officer go-to-market channels Chief High-performance to increased global Financial competition, increased CEOs lead Officer enterprises with demands on COOs translate into greater multiple lines of CFOs paid at the rewards. business, a global highest percentiles reach and diverse typically manage stakeholders, while complicated financial they also devise systems, with the strategies that added responsibilities adapt to shifts in of leading financial their industry—or policies and as well as even catalyze the accounting, tax, disruptive change. budget, insurance, credit and/or treasury functions.

General Counsel

High-performing general counsels develop reputa- tions as business-savvy advisors on a range of issues and strategies; those who are best-in- class are fully functioning members of the senior leadership team. Chief Marketing Officer Chief Information Increasingly Officer recognized as highly visible CIOs in the upper ech- enterprise leaders, elon have emerged as CMOs are taking on strategic players with more responsibility a rare and genuinely for driving strategy holistic view of the and revenue enterprise—particu- generation, which larly in organizations leads to increased that have undergone compensation. transformations. Chief Executive Officer Chief Financial Officer Chief Operations Officer Large Privately Held Large Publicly Traded Mid-Size Privately Held Services Company Multi-Industrial Business Unit Professional Services Firm

75th PERCENTILE $ 3,594,000 $ 1,403,000 $ 1,437,000

50th PERCENTILE 2,825,000 867,000 1,066,000 $ $ $ MEDIAN

25th PERCENTILE $ 1,977,000 $ 628,000 $ 813,000

Chief Marketing Officer Chief information officer GENERAL COUNSEL Mid-Size Privately Held Mid-Size Retailer Mid-Size Privately Held Consumer Durables Company Agribusiness

75th PERCENTILE $ 484,000 $ 841,000 $ 681,000

50th PERCENTILE 405,000 656,000 577,000 $ $ $ MEDIAN

25th PERCENTILE $ 319,000 $ 497,000 $ 367,000 THE GLOBAL ECONOMY The Dangers of Having a Midlife Crisis

and near-boomers are relief. “That’s the pas- n any part of the world, reaching an age when sion behind why I got either retirement or involved,” says Edelstein. a wide range of fac- their last major career It doesn’t take a tors can dictate the shift is on the horizon. genius to realize that the And in this case, it’s world is probably now I playing a role in what full of lots of Edelsteins. economy. There’s the kind undoubtedly will be one In fact, if he does sell that makes headlines— of the bigger business out, he would be part of a stories of 2017—the year theme of growing merg- countrywide elections, of the mergers. ers and acquisition activ- All of which leads ity across the world. unexpected job data, us to the tale of one After a respite last 50-year-old Rob Edel- year, deal-making desires market declines. Then stein of Danvers, Mass., shot up in 2017. In the who spent the last three so-called middle market, there are the more subtle decades as an entre- companies with revenues preneur in the lending between $5 million and shifts, such as a commod- business. “I started in $2 billion, 53 percent of mortgage banking when potential sellers said they ity price hike rippling I was 20 years old and did were “currently involved summer intern work,” in or open to making a throughout several indus- he says. Soon after that deal this year,” according he became a loan officer to a recent survey from tries. And don’t forget one and then set up his own Citizens Bank. That’s business, which he would up from 34 percent in a of the biggest factors of later sell, before setting similar survey the year up more lending firms. before. Likewise, on a late: a midlife crisis wave. Now at the half- much bigger scale, corpo- century mark, Edelstein rate deal-makers got off I’m being serious. has a new interest that to a cracking start this Demographics can fly may lead him to sell his year in January and Feb- current company: medi- ruary, with $504 billion under the radar of global cal marijuana. He says of deals announced—the the plant, prescribed by third highest since the analysis, but in enormous a doctor, gave a friend’s financial crisis and just a son who has brain sei- hair (less than 3 percent) numbers, baby boomers zures some much-needed behind last year’s first

22 Briefings On Talent & Leadership Constable is an author and former TV anchor for The Wall Street BY SIMON Journal. CONSTABLE

Could demographics lead to deals? A generation of business owners is nearing an age when many people consider either retiring or trying something new.

two months of $516 bil- concept of fatigue is more their window of oppor- most buoyant periods of lion, according to data pronounced than in the tunity may be closing,” M&A activity, business from Dealogic. past,” says Bob Rubino, the survey says. people have the tendency Large conglomerates, head of corporate finance The only question to shoot themselves in of course, have reasons and capital markets at now is whether all this the foot,” says Robert of their own for merging. Citizens Bank. Or put M&A activity is going to Bruner, dean emeritus of The so-called repatriation another way, there is a be healthy. It can make University of Virginia’s tax proposal in the United generation that’s ready to economists nervous to Darden Graduate School States, for example, may put their feet up. think that millions of of Business Administra- affect many. Others con- Naturally, there are entrepreneurs who have tion, and co-author of tinue to struggle to find financial incentives, too. established a measure the aptly named book, ways to grow business Business valuations are of wealth and security “Deals from Hell.” in such a tight money higher than they were may now risk some of Of course, those environment. An M&A a year ago. Last year, that without the due deals are a far cry from allows companies to add half of the potential diligence—or luck—that someone selling a loan revenues instantly. sellers Citizens Bank tracked their progress company to try a new But whether it’s a surveyed were concerned at a younger age. One medical treatment busi- major factor or not, the about whether they’d only needs to look at ness. For his part, Edel- fact that the whims of get fair value for their how foolish an M&A can stein seems to be moving a cohort of gray-haired business. Only a third become on a much larger cautiously. “I won’t sell folks can have an impact were worried this year. scale; remember the unless the price is right,” proves how easily human “Sellers recognize that fiascoes that were AOL he says. Will everyone elements play into the likelihood of being Time Warner and Daim- else be so wise? For now, global markets. “The undervalued is low and lerChrysler? “During the we’ll cross our fingers. •

Issue No. 31 23 ASIA MARKETS A Perplexing Diagnosis for Healthcare in Asia

The only hitch: The hos- certainly going to rise he vision was simple pital couldn’t find anyone across the continent, who could do it. thanks to aging popula- enough—great When it’s talked about tions in China and a medical care with in the United States, burgeoning middle class T healthcare “reform” in Asia that has both the a great bedside manner to revolves around how to insurance and the wealth give tens of millions of to afford treatments. This go with it. A hospital firm people access to medi- really is a great oppor- cal help. It’s a different tunity to be a leader, wanted to build dozens scale in Asia. Since make money and have a China embarked on its huge positive impact on of facilities across Asia in reform efforts in 2009, society. easy-to-reach residential the number of Chinese But “leader” is the covered by insurance operative word here. It areas. The two-story hospi- has grown by several turns out, it requires a lot hundred million. That’s of long-term care to find tals would offer all the right just China, by the way. the right executives who Indonesia has an ambi- have both the key skills services and technology. tious project to establish and the local knowledge mandatory insurance for to oversee all this. Most importantly, they’d everyone, making basic Let’s go back to our healthcare available to ambitious hospital firm provide a high level of cus- nearly all its 250 million looking to build out its tomer service to stand out, citizens and residents by chain. Few medical pro- the end of the decade. fessionals trained in Asia with highly skilled doctors Malaysia is also consider- know how to deliver the ing a universal insurance high-quality customer and caring nurses and sup- system, while Vietnam, care the firm wanted—it India and other nations isn’t generally taught port staff tending to every have boosted healthcare there. But if you were budgets significantly. to cross oceans, you’d patient’s need. Such efforts prom- find Westerners are ise to bring a greatly generally clueless about The leader of all this improved standard of all the regulations that would have a challenging living to literally billions countries from India to of people. Demand for Korea happen to have for but dream assignment. healthcare is almost delivering health care.

24 Briefings On Talent & Leadership Ling Li is vice chairman of Korn Ferry’s Asia Pacific Life Sciences BY LING LI practice.

Hundreds of millions can now afford a better class of care; they just need leaders to deliver it.

Indeed, a leader at an who could perform the doctor a year to get the place, the better. Hospi- Indonesian hospital told surgery wasn’t Indone- right permit. tals will need to develop us about his efforts to sian, and the country Then there are the a new eye to look for skill bring a new, minimally has extremely strict rules unwritten rules new sets that may not have invasive surgery to his limiting who can perform leaders to this era mattered as much before facility. But the only procedures. It took must contend with. In the reforms—skills like doctor at the hospital his non-Indonesian Chinese healthcare, agility, relationship many teams have loyalty building and strategic to their bosses, not to vision. ESSENTIAL SKILLS FOR their employers. So if In the end, our hos- the boss leaves, so does pital chain that wanted THE HEALTHCARE SECTOR the entire team. “Staffs it all actually found operate in the gray zone it—by splitting the job. n Have a strategic vision and be able where nothing is black It brought on a medical to execute it. and white,” one Chinese professional to handle healthcare executive told improving the level of n Operate effectively even when the us. “An overly structured care who also knew the way forward isn’t clear. leader won’t work.” ins and outs of local So what’s the answer? regulations. Then, for n Develop talent, as it’s often hard to For this industry, the the CEO job, it found recruit exactly what you’ll need. first and most important an expert in delivering step may be to realize high-quality service—a n Prioritize work well. that nothing is going to hotel executive with happen overnight. The years of Asia experience. n Build formal and informal sooner a more delibera- Its patients were going relationships inside and outside tive approach to training to get great medical care the organization. and preparing leaders for with a smile. We call that healthcare reform takes a case cured. •

Issue No. 31 25 EMOTIONAL INTELLIGENCE The Most Dangerous Blind Spot

expense of the store competencies that make e was doing great— managers he constantly up EI, ranging from at least in his own berated. Intensity, in his possessing empathy to case, meant focusing only having a positive outlook line of vision. on what was wrong. Sure, to resolving conflict. But H he had managed to spot in the end, the one that As a senior director at a and fire failing managers matters most is one Greg before, but in his new ter- didn’t have. Fortune 500 retail com- ritory, he had demoralized Indeed, new research the team so much that too done for Korn Ferry Hay pany, Greg had become many leaders for him to Group has found that oust were missing their when executives demon- one of the company’s best targets. As the second strate high self-awareness, performers, overseeing market’s results sank, they are likely to show Greg couldn’t understand strengths in as many as 10 a $1 billion market. He what was wrong. of the dozen major com- Think about it: Is there petencies that define EI. knew he wasn’t afraid to anything more frustrating It is the self-aware leader than a corporate execu- who has the most positive take swift action and that tive who is clueless about impact on a team’s work- his or her own weak- ing climate and perfor- he brought true intensity nesses? Is there no harder mance—and who instills leader to work with or the most loyalty. High EI to his work. The company improve? leaders, research shows, had even handed him a We are talking here, of build team climates in course, about the impor- which people know what second market. tance of self-awareness is expected of them, have and just how dramatically challenging but attainable But it turned out that our it alters the workplace. goals and feel empowered Self-awareness is part of to attain goals in their confident district manager what makes up what I own way. call a leader’s “emotional But Greg’s high-drive had a critical blind spot: intelligence” (EI), a group style—with the opposite of competencies that effects—has become all himself. He didn’t realize studies show may well too common in many that all that vaunted suc- be the best measure of a businesses, when leaders leader’s odds at success. push their people to hit cess had come at the In all, there are a dozen ever-higher targets and

26 Briefings On Talent & Leadership Goleman, a former New York Times writer, is author of the international bestseller “Emotional Intelligence” and a noted speaker on leadership development. BY DANIEL Find his columns at GOLEMAN kornferryinstitute.com.

Is there anything more frustrating than a leader who is not self-aware?

put a hypercritical focus Through Joss, he also in Greg’s own career, Engage the person in an on people’s failures while received candid feedback cared about and believed open, curious way—a ignoring successes. That from 15 stakeholders, in him. joint inquiry that invites may work at first, but as people who worked with When he saw himself critical thinking and time goes on, it batters him and could tell him falling back on his problem solving. morale, lowers motiva- how he might improve. old confrontational This exercise in self- tion and loses people. And finally, he started to style, he would take a management goes hand And because such leaders think about leaders he moment and remember in hand with another EI seem to be succeeding in admired and realized to apply an approach competency: empathy or the short term—as they he wanted to model that he took with his understanding and con- hit quarterly targets— himself on one who, early two young daughters: necting with his direct they turn a blind eye to reports in the moment. the downsides in the This attunement creates long term. APPLYING receptivity, so that his The good news is that people are open to his the blindsided leader can SELF-AWARENESS, influence, and motivated be turned around. Greg FOUR WAYS and enthusiastic about connected with Jennifer their own abilities. In fact, Joss, a veteran executive Spot the feelings and thoughts the results would speak coach in Oregon, who 1 that drive combative impulses. for themselves: Greg’s tells me her first step was initial market continued a universal one: making Don’t confront a person; rather, to perform exceptionally, Greg aware of what was 2 connect with them, engaging in and within the first six limiting his own suc- a new way. months, his new market cess. She told him to pay turned in their best per- careful attention to his Instead of dictating, seek formance in many years. thoughts and feelings options in a non-judgmental way. In the end, there would when he talked with 3 be confidence—and self- district or store managers awareness. See engage Lead through coaching, not • about their performance, .kornferry.com/EI for a stormy critiques. and to note what worked 4 special series on emotional well and what did not. intelligence research.

Issue No. 31 27

U P. IT’S WHERE PEOPLE ARE COMPENSATED WITH A PURPOSE.

Today’s most skilled professionals look at more than money when considering a career opportunity; they look to companies that o er personal growth, engagement and collaboration. These companies are far more likely to attract the best talent. Korn Ferry Hay Group has developed unique tools to help your organization compensate talent with purpose—because when the payo is right, the results can be tremendous. See how we can help get your organization to UP at kornferry.com/rewards

We have the world’s most comprehensive pay database—PayNet. It boasts current reward data for over 20 million employees in over 110 countries, across 25,000 organizations. AGILITY BY RUSSELL PEARLMAN / ILLUSTRATIONS BY PETER CROWTHER THE POWER TO MAKE CHANGE STICK

31 EXECUTIVES HAVE GREAT IDEAS, BUT ALL TOO OFTEN THEY NEVER GET EXECUTED. HOW A KEY SKILL SET HELPS LEADERS PULL OFF CHANGE.

Rita McGrath tells it, it was a great strategy for a firm that needed one. For years a U.S.-based multinational company had been focused on selling commodity chemicals while giving away the expertise on how to use them for free. Now it planned to flip that business model on its head, developing long-term consulting contracts with its customers to capitalize on that highly valued advice. Projections showed that the firm could increase its profits from around 5 percent of sales to around 30 percent of sales.

MORE THAN 4 IN 10 EXECUTIVES SAY THEIR BIG CHANGES DIDN’T STICK.

34 the reality never quite turned out that way. For BUTtwo years the sales force never focused on creating consulting contracts—it just kept doing what it had been doing for years, selling as many tons of chemicals as possible. McGrath, a professor at Indeed, 44 percent of corporate executives say Columbia Business School, that their big changes didn’t stick, according to a study co- came in and quickly diagnosed sponsored by the Economist Intelligence Unit and the Project the problem. The company Management Institute. (Other groups place the failure rate at hadn’t made the structural 70 percent or higher.) Even more startling, nearly half of senior adjustments needed to managers admit that the change efforts most commonly fail at the execution phase, according to consulting firm Robert Half pull off its grand strategy. International. Yet that awareness clearly doesn’t lead to bet- That inflexibility brought ter results. “Companies are really good at saying ‘you better act everything to a standstill. “It’s this way,’ and not so good at figuring out what they need to do inertia,” McGrath says. “People to help people act in that way,” says Greg Shea, a professor at the like to continue to do what Wharton School of Business. “That’s hard work.” they’re doing.” It’s also work that is fast becoming a matter of survival in In today’s ever-shifting today’s world. Over the last decade, the landscape has become global economy, brilliant littered with firms that had great ideas to change and still minds are coming up with failed. Blockbuster tried to adapt to on-demand video but still great strategies to get ahead. went out of business. DaimlerChrysler had a great plan to create the dominant auto company but failed spectacularly execut- Yet an overwhelming number ing that plan. Kodak saw the era of digital photography coming, of these business innovations, but couldn’t keep itself as the premier name in cameras. (To its cultural transformations and credit, Kodak is still around.) other great-on-paper ideas fail. Still, there are leaders who have been able to get their orga- Leaders will often publicly nizations to transform successfully. GE wanted to become blame the economy, an upstart more of a global industrials business, so it successfully shed its rival, the political environment finance, media and other divisions, and now 70 percent of its or even the weather. But the business is outside the United States. Coca-Cola reimagined truth is a lot simpler: Many of itself as a beverage company, not just soda, and has grown prof- these plans start, but the firms its by nearly 50 percent over the last decade, even as people in and their leaders aren’t agile many parts of the world have cut back on drinking Coke. At a basic level, leaders at firms like these have been able to outline enough to make them stick. a strategy, motivate others to embrace the strategy and put the systems in place to help everyone successfully implement the change. “That’s the magic formula for getting change to happen and getting it to stick,” says Jane Stevenson, global leader for CEO Succession and vice chairman, Board and CEO Services, at Korn Ferry.

34 35 he ability to follow through on change— to compensation, McGrath says, but they were and being agile enough to shift constantly— holding off because they knew that changing wasn’t quite so important for most of the that would be complex. In the end, it would 20th century. U.S. automakers had no take another year to implement an incentive competition from the 1930s through the plan to get the sales force to start building consulting relationships with customers. 1970s. Telecommunications was strictly Other times, the barriers to success- regulated for more than a century and ful change aren’t things that show up on a dominated by one unchanging firm. Even Gantt chart. These internal failures are more Western Union was still sending telegrams behavioral and relationship-driven, sending until 2006. The story wasn’t much different signals that undermine the intended change. in other developed markets either. Japan A retailer, for example, could want its senior built a strong economy based on innovative leaders to become more collaborative, but export-driven firms offering lifelong the individuals are working in an environ- employment. South Korea had its multi- ment where board members openly fight industry mega-oligopolies. Germany did with each other. Or a firm wants its employ- T ees to become more agile and empowered just fine with its backbone of family-owned but sabotages itself because senior managers small- and mid-sized businesses. constantly point out employee mistakes. And But now upheaval is the norm, not the exception. Every there are plenty of examples of managers single business sector has gone through strategic shifts, reorga- demanding improvements in quality stan- nizations, business model reviews and other transformations, dards but backing down the moment there’s usually more than once, in the last 15 years. The rapid evolution a production delay. in technology is forcing much of the shifting, of course, but there are plenty of other factors, too—including aging baby boomers, the growth of emerging markets and the nature of how people work. Even the once-staid utility sector has embraced change, as the old model has splintered into different organizations gener- ating, transmitting and marketing electricity. Helen Vaid had a to walk Unfortunately, just because organizations have seen the a fine line in her position at Walmart. As VP light on change doesn’t mean they’re particularly good at it. for Digital Store Operations, Web and Mobile, Mergers and acquisitions, some of the most public of big changes, she was responsible for the growth and prof- fail to create value anywhere from 70 percent to 90 percent of itability of the massive retailer’s online pres- the time, according to multiple studies (think AOL Time War- ence—but knew she needed managers of the ner, Sprint Nextel or, for an outside-the-U.S. example, Tata physical stores to buy into her strategies. So Steel and Corus). Often the obstacles to change are easy to spot. she told her colleagues that changes were nec- Consultants can lay out one example after another where the essary to help solve one common customer execution didn’t match the strategy. There’s the company that complaint: in-store delays. “I have never wanted to be more client-focused but didn’t ask clients for feed- found anyone who has ever said, ‘I love wait- back, or the CEO who wanted to develop a results-oriented cul- ing for this,’ ” Vaid says. That was a purpose ture in his firm but didn’t invest in teaching the employees how her colleagues, regardless of whether they to become focused on results. worked for the online store or the bricks-and- In McGrath’s case, her chemicals company made inroads on mortar stores, could get behind. many other procedures to help it become more of a consultant- Vaid also made it clear that she trusted driven business model, but it didn’t make any changes to the her colleagues and empowered them to compensation system. People were still getting bonuses based on implement changes. Ironically, the less direct the amount of product they sold, so they kept pushing products, control Vaid had over the strategy, the better not services. To be fair, company executives knew they had to get the results, she says. “On every single level,

36 36 36 These common obstacles can keep even the best-laid plans from succeeding. Here’s how agile leaders everyone actually makes more effort and puts and companies can a lot more diligence into the choices they are making because they know that the buck overcome them. stops with them,” she says. The results were impressive. Walmart’s app had fewer than 5 million users in early 2014. By the middle of 2015, it had 22 million users. Vaid is trying for similar successes in her new role as Pizza Hut’s first-ever chief customer officer. Vaid’s experiences highlight several of the tips that experts say can help make big Employees ask, The current changes stick. First off, a change program “What’s the point?” system deters change. isn’t going to go anywhere if the people who Leaders often say what The boss wants to are supposed to carry out the changes aren’t needs to change but don’t implement a strategy, but incentivized to actually change. As in many explain the purpose— the employees are paid to other situations, money talks. But there’s thus crippling employee keep the status quo. more to motivation than just simply paying motivation. Solution: Give employees people. Giving employees a common sense of Solution: Emphasize the incentives to follow through purpose is what drives performance. Indeed, “why.” A clear purpose and adapt the company’s not being able to rally employees around helps drive tough changes. infrastructure to the new a purpose is one of the main reasons big strategy. change drives fail. “To grow profits and revenues is not a strategy or a purpose,” says Korn Inertia. Ferry’s Stevenson. High-level executives Bad examples are set. The purpose doesn’t necessarily have to be assume change will happen The CEO demands changes because they say so. without personally as grand as “save the world” or “reinvent cap- adopting them. italism,” either. For example, employees can Solution: Integrate change become excited about cost savings if it means not as a side project but Solution: Be self-aware, freeing up funds for future projects they want within people’s workday. lead by example and to pursue. And it helps to reinforce change explain how you’ve with a set of simple signals sent from the boss. personally incorporated Lisa van den Berg, solutions leader, Korn Fer- the change. ry’s Strategy Execution and Organizational Development in the Netherlands, suggests All mistakes bosses boil that message down to five key are punished. areas—and deliver them in person when pos- Many leaders don’t accept sible, as well as repeating them when problems that change may not be pop up. “The extra effort has a cost in time done right the first time, and resources, but the impact can be huge,” derailing the whole project. van den Berg says. But perhaps the biggest thing leaders can Solution: Share stories. do to help make transformative changes stick Let workers share their successes and setbacks. is to develop an organization that is agile— both in the company’s structure and its people. The organization has to be designed in a way that lets employees implement big changes. Tweaks to an organization can come in many forms, from a radical redesign of a supply chain to simply a change of meeting times. Shea, of the Wharton School, tells a story of a general foreman he got to know during a conference. The foreman was tasked with cutting down production problems on his factory line. Being in a unionized shop, he couldn’t necessarily order the workers to weed out problems or pay them more even if they did. But he tweaked the system by marketing staff will work out of the offices of the firm’s digital encouraging workers to write down com- ad agency for six months, and then it’ll spend six months working mon production problems on a flip chart in out of the offices of another digital marketing group. “We’re sit- the break room, creating a way to routinely ting in their culture, beginning to think like them,” Bough says. update which problems were getting fixed, Making transformative changes stick is still hard even and, as a bonus, he gave T-shirts to workers with these factors in your favor—but without them, changes who were good at fixing problems. The fore- are going to be nearly impossible to execute, no matter how man overseeing all good the strategy. Paul Laudic- this ended up “really ina recognized that, when he working beyond was elected CEO of A.T. Kear- his pay grade,” an ney in 2006 after he and his fel- impressed Shea says. low partners bought out the It also helps to INCENTIVES WORK: struggling consultancy from have employees who EDS. Laudicina not only had to are agile enough re-establish A.T. Kearney’s rep- to pull off changes. ONE MANAGER utation for high-quality consult- Agile employees are ing with clients but needed to unafraid to chal- reinvigorate the staff. He had a lenge the status quo, GAVE T-SHIRTS TO turnaround strategy but knew remain calm in the that it had no hope of being exe- face of difficulty, take EMPLOYEES WHO cuted without getting everyone time to reflect on motivated to make it work. “Vir- their experiences, are tually no one gave us a chance of open to learning and CURBED PRODUCTION survival,” Laudicina says. often actively seek He first rallied the 2,500 out challenging situa- PROBLEMS. employees by visiting all tions. In short, they’re 34 offices worldwide and perfect to be able reminded them of the firm’s to handle change, original purpose: do good work both now and in the that will deliver value to clients, future. Agility can literally pay for itself. A themselves and the world. He then pushed for a huge invest- Korn Ferry study found that companies with ment in employee training and development (much to the cha- the greatest rates of highly agile executives grin of many of his fellow partners, who only recently had produced 25 percent higher profit margins written huge checks to buy the firm). The changes were all- compared with peer companies. encompassing. “There were not a lot of break-glass-and-pull- Leaders can go hire agile employees or lever types of things,” Laudicina says. they can develop them within their existing But it worked. By the time Laudicina stepped down as CEO workforce, even as they are pushing a broader at the end of 2012, the firm had 3,000 employees and had grown change. Marketing consultant Bonin Bough its revenues by more than 33 percent. • is devising a digital strategy from the ground up for a mid-sized consumer products firm based in the New York area. The 40-person

As technology takes away the need to think on the job, workers all over may struggle to find something to do.

By David Berreby

41 ver been chased by a hungry bear, an alligator or a shark? If so, you are one remarkably unlucky person. Almost everyone else in our species checked out of the food chain thousands of years ago. As the comedian Louis CK says, we’re troubled by mort- gages and traffic and money, but at least we don’t have to worry about, say, cheetahs down at the train station. E What conferred this easy life on Homo sapiens, of course, was 20,000 years of inventing devices to stand in for our muscles. All that time, we have been steadily offloading physical work onto our tools, from flint-tipped arrows and chariots to 747s and Mack trucks. In fact, the human race does so little physical work now that about 40 percent of all adults worldwide are overweight, according to the World Health Organization. A significant fraction of humanity forces itself to exercise—that is, to do physical work that serves no other purpose than to get done—just to stay healthy. Now comes a new problem, as we move from those muscle helpers to a world of artificial intelligence that, in effect, is full of mind helpers. Indeed, over the past decade, advances in computation and communication have begun yielding tools that do as much work for our minds as mighty machines do for our bodies. Increasingly, experts believe that this combination of disruptions—the Internet of Things, ubiquitous artificial intelligence, machine learning—add up to a revolution that will end up outsourcing mental and even emotional labor as thoroughly as machines now outsource physical labor. And this one, they say, won’t take thousands of years—and it will create all sorts of problems for company leaders with sizable workforces running out of things to do with their heads.

42 It’s a revolution that will end up outsourcing mental labor as thoroughly as machines now outsource physical labor.

42 was teaching a class on the Internet,” says Lauren McCarthy, an artist, programmer, and instructor at UCLA’s School of the Arts and “IArchitecture. “And the students kept asking, ‘What is the Internet?’ ” Having grown up with constant con- nection, the students didn’t really understand where the bounds of it were, she says. Already, at the dawn of the age of smart cars and smart refrigerators, they’re used to having any information they need at their beck and call. These digital citizens are rolling smoothly into a world that makes intelligence as omnipresent as information. Already machines collect data, analyze it and use that analysis to perform work that not long ago required a human brain. Today, for example, algorithms tell judges which prisoners should be denied bail, police where to deploy officers and security patrols at airports where to go. Algorithms read X-rays and other results from medical procedures, and offer organizations an approach that scholars at Carnegie- Mellon’s Human-Computer Interaction Institute have dubbed “algorithmic management,” where, as one recent paper put it, “human jobs are assigned, optimized and evaluated through algorithms and tracked data,” rather than the judgments and analyses of managers. Optimists tout the obvious benefits of having intelligence take up our mental tasks: more productivity, less time spent on busywork, and improved performance and accountability. The economist Jens Ludwig and his colleagues at the University of Chicago Crime Lab developed an algorithm to predict which prisoners would skip out on bail. When tested on a data set of actual case histories, it guessed wrong 8.5 percent of the time. But the judges who worked those cases in real life were wrong 11.3 percent of the time, Ludwig told a conference at NYU Law School’s Brennan Center for Justice last fall. Moreover, he noted, the algorithm could be altered to do better—not something you can say for sure about humans. “There’s nothing more opaque than the inside of a judge’s head,” he said. Given a chance to ask a question, a practicing judge in attendance welcomed the algorithmic tool, saying, “We could use all the help we can get.” But he added, “Just don’t do it too well, because judges like to have job security, too.” DEAD TIME In job after job, machines are taking work from humans, saving time but leaving people with less to do.

THEN NOW HUMAN ONLY MACHINE ASSISTS/REPLACES HUMAN

TRADING A MINUTE OR TWO TO SHOUT MICROSECONDS, STOCKS ORDER ON FLOOR AND HAVE DONE BY ALGORITHM TRADE RECORDED

SETTING BAIL AT LEAST SEVERAL MINUTES, SECONDS, WITH LIKELIHOOD FOR A POSSIBLY HOURS, TO READ OF FLIGHT AND FUTURE CRIME DEFENDANT CASE FILE PREDICTED BY ALGORITHM

DIAGNOSING MULTIPLE HOURS TO READ EIGHT MINUTES, ANALYSIS CANCER, CASE FILE, SEARCH FOR PERFORMED BY IBM SUGGESTING RELEVANT RESEARCH WATSON AT MD ANDERSON TREATMENT PLAN CANCER CENTER

LEARNING 20 TO 30 HOURS OF LESSONS ZERO HOURS, IF USING TO DRIVE AND PRACTICE AUTONOMOUS VEHICLES

DECIDING MULTIPLE MINUTES TO ASSESS SECONDS. COMPUTER WHERE TO THE CURRENT DAY’S WORK, PLOTS PATROL TO MAXIMIZE DEPLOY AIRPORT INFORMED BY YEARS OF COVERAGE WHILE PRESERVING SECURITY PATROL EXPERIENCE UNPREDICTABILITY

SCHEDULING MINUTES TO HOURS, DONE BY A SECONDS, DONE BY ALGORITHM WORKERS’ SHIFTS MANAGER WITH A CALENDAR EFFICIENTLY AND FAIRLY

LAYING DOWN SEVERAL HOURS, FOR ONE-FIFTH THE TIME, FOR BRICK WALKWAY EXPERIENCED BRICKLAYERS TIGER STONE PAVING IN FINE MACHINE ROAD PRINTER HERRINGBONE PATTERN The nervous chuckles that greeted that remark are given mental work to an app or gadget, you don’t stay the soundtrack of the AI revolution. They’re the sound interested in doing it yourself. After a while, you aren’t of people attracted to machine intelligence’s capac- able to do it yourself, any more than an out-of-shape ity but worried, too, that the effects on our minds driver could run a marathon. of this much faster revolution will be like the effects This is a problem for any complicated system, from of machines on our muscles. This assistance for our airline cockpits to nuclear power plants to self-driving mental powers could free us to think great thoughts, cars because, “Engineers design systems according to have great adventures and make great art. But it may what they expect, but by definition can’t predict the also leave us mentally flabby and inept. unexpected,” says Bruno Berberian, a psychologist After all, with mental and emotional skills, the who studies how people interact with highly auto- operating principle has always been, “Use it or lose it.” mated systems at the French aerospace lab ONERA in Today, we don’t remember phone numbers because our Toulouse. “As soon as we are out of the realm of the phones know them. Tomorrow, will we remember how expected, human beings will have to get back into the to charm our spouses when the phones already have control loop.” that down pat? The science-fiction writer Liu Cixin Scientists aren’t alone in thinking about the believes, as he recently wrote in the New York Times, boundary between enabler and enfeebler. Artists have “A sort of learned helplessness is likely to set in for us, been playing with that border, too, creating algorithms and the idea of work itself may cease to hold meaning.” and gadgets that are transparently weird, in order to In the near future of triumphant AI, he wrote, we may get people to take a second look at their assumptions end up like docile, pampered pets, being led here and about technology. there by a wise machine that knows us better than we But a funny thing often happens to these over-the- know ourselves, “as unaware of its plans for us as a top creations. Even as some people find them creepy, poodle on its way to the groomer’s.” someone else accepts them as a helpful piece of tech. The problem, as researchers who work on complex A few years ago, for example, McCarthy designed automated systems have learned, is that once you’ve a gizmo she called the “Happiness Hat.” It was a wool

46 is too shallow and stressed for your own good. The Kolibree smart toothbrush monitors how and where you brush your teeth, then sends the data to a smartphone app that tells you how to do a better job. The Upright smart wearable posture trainer sits on your back and buzzes if you slouch (and tracks performance with a smartphone app, of course). The online Crystal app takes over the job of figuring out a new acquain- tance. It analyzes public data about a person to tell you what that person is like—and how to best communi- cate with him or her. The Romantimatic app for smartphones will even handle the sensitive task of showing people you love them—it will text a significant other at specific times (and suggest words for the message). Just how much of our mental and emotional lives do we want to leave to machines? And what will we do with the free time we win by delegating to them? Perhaps we’ll need to find the mental equivalent of the gym and exercise our minds for the sake of exercising them. A 2012 study by Gerald Matthews, a psychologist at the Applied Cognition and Training in Immersive Virtual Environments Lab at the University of Central Florida, suggests such mental gymnastics could help people get back in the control loop of a self-driving car. He and his colleagues gave passive passengers a smartphone task—answering trivia questions—and discovered that it led them to be more alert when they cap that harbored a bend sensor, which attached to the had to take control back. wearer’s cheek, and a servo mechanism in the back of There probably aren’t easy answers to the question the hat. Attached to the servo was a metal spike, which of how to deal with the sudden arrival of tools that dug into the user’s head unless the cheek sensor detected outsource mental work—in part because there is much a smile (how much it dug was inversely proportional to we don’t know about how people will interact with how wide the smile was). “Most people understood it was sort of a critique or a joke or satire,” McCarthy Algorithms read X-rays says, “but then I got e-mails from people saying, ‘I’ve been for doctors and tell judges talking to my therapist and he thinks that I should really which prisoners should try this thing because nothing else has helped me cure my be denied bail. depression.’ ” She realized, “The line of what was accept- able to people is different for each person.” powerful AI, and in part because people will probably These are lines we’ll all soon have to think about, as differ in their needs and preferences. intelligence-on-tap both attracts us and creeps us out. “When does it go too far?” McCarthy asks. “And Aspects of our personal lives already can be outsourced when do you find aspects of this that are terrifying, to gadgets a bit like McCarthy’s hat. The Hapifork, but then when you try it, it actually does something for example, gets you to eat less by vibrating when for you? How do you negotiate that, navigate that dis- it detects that you are munching too fast. The Spire sonance?” The answers to such questions aren’t clear. But tracker buzzes when it detects that your breathing one thing is certain: It’s time to start asking them. •

46 47 A new milestone for hiring has arrived, but can firms blend this group with millennials?

BY MEGHAN WALSH Artwork Montoya by: Richard

“[Starting a business] would have been more difficult to

do if I were Artwork by: Matthew Gush younger.”

— P A U L TA S N E R , AGE 70 ounging in the lobby of San Francisco’s WeWork office, the trendy collaborative work space, Paul Tasner is wearing jeans with a brick-red pullover, chunky black glasses and a dusting of snowy stubble. To the pitter- patter of others playing table tennis and rapper Cam’ron singing about getting it on, Tasner explains what he brings to his work that he believes sets him apart from the millennials who flank him: a sprawling network, a sincere spirit of collaboration, know-how, drive and a sense Lof humor. His real selling point, though: experience. More than 40 years of it. The Bay Area father of four has spent his entire career in consumer-product packaging, eventually acquiring titles like senior director and vice president. When Tasner was laid off during the recession, he could have retired but says he wasn’t ready to give up his work or his comfortable lifestyle. So during a time when others his age were collecting full Social Security benefits, Tasner and his business partner—20 years his junior—decided to build their own profitable business helping companies transition to sustainable packaging. “It would have been more difficult to do if I were younger,” he says.

51 Tasner is 70 years old, putting him in course, neither the brain drain nor the same decade as Donald Trump, Larry the intergenerational challenges Ellison and Martha Stewart, all of whom come as a surprise. At last count, one beg employers to consider the question: in five domestic workers—many of Has 70 become the new 50? But they also them top executives, lawyers, doctors raise another dilemma: What place does and in specialized roles—were over the graying-but-young-at-heart have in age 65, according to the Bureau of Labor Statistics. A rising 7 percent today’s baby-faced workforce? Ofare already over 70. But even among those with the foresight to The labor pool is aging, which means recognize the crisis that the looming loss of experience is likely to an invaluable knowledge base may soon create over the next decade, few will speak on the topic. become obsolete if something isn’t done Regardless that the number of men who continue to work past to plug the brain drain. While millen- the age of 70 has doubled over the past 30 years, recruiters see age nials may be the largest generation as a wild card, pitting wisdom against agility, longevity against to pass, they don’t have the inherent loyalty, and intellectual against emotional IQ. The Center on Aging sophistication to replace men and and Work at Boston College reports that a quarter of companies women who witnessed the enactment of surveyed say they are hesitant to hire older workers. “It’s still a rarity the Civil Rights Act, the energy crisis of that you would advertise age,” says Leslie Gaines-Ross, a reputation the ’70s and the emergence of the World strategist for CEOs and corporations at Weber Shandwick, a global Wide Web. “Companies are going to face public relations firm. But there are signs some organizations are fig- urgencies in the very near future if they uring out ways to accentuate the talents of a group that many have don’t start looking beyond millennials,” dismissed as superannuated. says Mark Schmit, vice president of Ten years ago, when Tasner interviewed at an industrial start-up research at Society of Human Resources selling sustainable, non-toxic household cleaners, he says his age felt Management (SHRM), a professional like the gorilla in the room. But their response was, “How long do human resources association head- you think people stay here? quartered in Virginia. “You’d better We’re looking for a solid two have a plan for transitioning knowl- to three years.” As a young edge to the next generation.” The labor pool is company, Tasner says they Yet, based on SHRM surveys, wanted a veteran who could the majority of companies haven’t aging, which means serve as a mentor. made plans to recruit or retain There isn’t much data their veteran employees. Human an invaluable specific to hiring or career resources departments are frozen knowledge base may transitioning for this age by uncertainties of how to profes- group, but anecdotally most sionally integrate baby boomers and soon become obsolete say they go into consulting their offspring, who have not so qui- rather than new full-time etly seized the reigns. It’s the grand if something isn’t positions. That’s partly by experiment: Can age groups as much done to plug the choice; as grandparents or as 50 years apart work successfully— caregivers, they want the and nicely—together? And perhaps brain drain. flexibility and the freedom even more relevant is whether the of not working for someone impending silver tsunami will be else. Nor do companies enough to push corporations past their want to take on the healthcare costs. The other reason, says Nick reluctance to consider senior applicants Corcodilos, a Silicon Valley headhunter since 1979: HR departments often hobbled by skills sets out of step haven’t caught up to the age-quake. Rather than identifying the with the high-tech world of today. qualities and characteristics best suited for the position, he says Because, as Andrés Tapia, a global expert companies sort résumés using superficial algorithms and LinkedIn on diversity and inclusion and a senior profiles. “Once you give up your spot in the game, it’s hard to get client partner at Korn Ferry, says, “This is back in,” says Jacquelyn James, co-director of the Center on Aging the moment to push the panic button.” and Work at Boston College.

52 oger Locy, who is cresting 70 this year, has worked in nuclear power since 1966, after joining the Navy out of high school. He says the main difference between entry-level and senior nuclear operators such as himself is one knows how and the other knows why—an important distinction when a complex crisis like Fu- kushimaR arises. In other words, it’s imperative the industry has veterans like Locy around to call on in case of emergency. Perhaps the high stakes are “We have new guys who what have forced the nuclear industry to figure out the key to are smart, but they just successfully transferring power don’t have the experience. between the generations. At Having someone around least part of the answer has they can ask questions is a been to keep its older workers engaged. This significant seg- big benefit.” ment of the energy sector is —ROGER LOCY, AGE 70 expected to be hit especially hard over the next few years as the Nuclear Energy Institute estimates nearly 40 percent of its workforce will be eligible for retirement by 2018, creating an immediate need for roughly 20,000 skilled laborers. Often, Locy says, he finds himself the oldest in the room, prompting a predictable quip: “Do you know they let kids operate nuclear reactors now?” Just a few months but many golf rounds after Locy retired in 2006, a plant in nearby Oswego came calling. Locy returned as OLDER AMERICANS a contractor, which afforded him a flexible three-day schedule IN THE WORKFORCE and the mental freedom to leave his work at work. He’s now part of a team tasked with developing strategies should another Fukushima-like catastrophe strike, which has him working 10- 11.8 MILLION / AGE 70–74 hour days, six days a week. “We have new guys who are smart, but they just don’t have the experience,” Locy says. “Having someone around they can ask questions is a big benefit.” 2.2 Common assumptions say that millennials don’t listen and MILLION % baby boomers bristle at the prospect of change. But Locy hasn’t EMPLOYED found it difficult to navigate the intergenerational relationships, 18.4 pointing to the time he was paired with a 23-year-old female engineer on a project. It was an ideal counterbalance of skills: She 19.6 MILLION / AGE 75+ tapped him to answer questions and double-check her work, and he let her handle the Excel spreadsheets. “I don’t do that stuff,” he chuckles. Two main factors have kept Locy working well past re- 1.6 tirement age: The companies have made it financially worthwhile, MILLION % not insulting him with offers half of what they would present to EMPLOYED someone 20 years younger. And they’ve given him challenging, 8.1 meaningful work. Source: Bureau of Labor Statistics, 2016, civilian population only.

53 The GIVE THEM SPACE… While millennials prefer open environments, boomers still Hoodie value having individual space. So create open work areas, but also dedicated quiet areas. Challenge …BUT DON’T BUILD WALLS MILLENNIAL AND Use desk partitions as a happy compromise between full SILVER-HAIRED cubicles and an open plan. WORKERS MAY BE They offer privacy but also easy communication with DECADES APART, neighbors. BUT EXPERTS SAY ENCOURAGE THESE STEPS CAN MENTORING HELP THEM TEAM According to one Harvard UP BETTER. study, 65 percent of boomers say millennials look to them for advice, while three-quarters of millennials say they enjoy working with boomers. PART OF THE CROWD Older workers are looking for social relationships, research shows. Encourage inclusion and create opportunities for different ages to get to know one another. THE BEST BENEFITS Some company benefits that look great for boomers are useless to younger workers, and vice versa. Create options for everything from tuition assistance to elder care and financial counseling services.

CUSTOMIZE PERFORMANCE EVALUATIONS Use the same metric but review work differently. Boomers prefer written evaluations and sit-downs; millennials want more immediate, on-the-go feedback. Artwork Montoya by: Richard xperts say the key to blending workforces with such a huge generation gap is to avoid Eignoring the issues and begin looking for solutions. In today’s start-up economy, younger managers are either afraid to manage people significantly older or try to exert too much authority, which course, there are obvious downsides of the veterans often rebuff. Companies that geriatric demographic: They may be luddites, have been successful, though, are able fossilized in their ways, or burnt out or lethargic, to empower and engage, which on a f and—it’s true—the clock is ticking. But research- logistic level might mean making sure to Oers are discovering that some cognitive abilities don’t peak until schedule meetings when older workers, if later in life. A study published in the Journal of Applied Psychology working part-time or remotely, are in the last year measured mental abilities among executive job applicants office. Video conferencing is another tool across the age spectrum. Generally, older executives scored modestly for keeping them engaged, while offering lower than younger ones, age-appropriate health and family ben- with the largest drop-offs efits also can help. for subjects older than 60, Research also shows older workers which is why positions Many have are looking for social relationships. like air-traffic controllers That may be one reason Peter Cappelli, have a mandatory retire- director of the Wharton School’s Center ment age of 56. Yet age suggested that for Human Resources and author of the has a positive correlation book “Managing the Older Worker,” with higher crystallized diverse teams believes it’s best to keep diverse age intelligence, which mea- groups mingled in the office. Evidence sures experience-based spanning gender, suggests that mixed-age groups tend knowledge such as verbal to get along better and perform better capability and emotional culture and age than groups of the same age, so there IQ. Widespread cognitive- is actually less conflict than if you have ability tests used for spark the greatest a room full of 20-somethings. “The narrowing candidate pools 70-year-old is not in competition with often don’t measure these innovation, and that the 25-year-old,” he says, making them attributes. more apt to help each other. While cognitive decline creativity can often That may be because their goals are starts in a person’s 20s, a different. According to a Pew Research University of California, be an outgrowth Center survey, the biggest difference San Francisco neurosci- between the generations is work ethic: ence lab has found that of connecting Younger workers go after money and exercise, meditation and the next promotion, while their elders engagement in the arts and are motivated by a greater mission. The sciences can halt the back- contrasting ideas. generational mix also benefits creativ- slide. So a mentally and ity. Many have suggested that diverse physically active 70-year- teams spanning gender, culture and age old might be more astute than a loafer half her age. There’s also little spark the greatest innovation, and that research that shows lower cognitive ability affects job performance. creativity can often be an outgrowth of That’s certainly how our gray-haired man working alongside connecting contrasting ideas. “Senior the hoodie-wearing futures of industry sees it. Tasner say he’s as members bring a perspective that com- motivated now as at any other point in his career. He enjoys a sense pletely colors and changes the dynamic,” of purpose in a society that in many ways has written off older indi- says Henry Watkins, vice president of viduals. Still, does Tasner feel old here? He takes a sip of his murky business development for the Medici 2 o’clock beer and looks around. “No. I feel more out of step with my Group, a strategy and innovation firm. peers playing golf three times a week.” •

55 56 BY JONATHAN DAHL

Can business schools keep up with today’s frenzied world? Kellogg School of Management’s Sally Blount is taking some bold steps. EVEN YEARS AGO, Sally surpassing a degree in education Blount, dean of North- as the most popular in terms of western University’s graduating students. But you only Kellogg School of need to ponder all the gyrations in Management, business—a new global economy, arrived in Evan- digitalization, the gig network—to ston, Ill., and understand the challenges the MBA announced a has faced to keep up. And then there’s seven-year plan higher education itself: Would any- to transform the one have guessed the true impact of school. The cam- online options a decade or two ago? paign focused on a goal “The MBA is a tremendous success no smaller than reinventing story. It is also the focus of tremen- management education as we know it, dous change,” says John A. Byrne, including a $350 million fund-raising founder and editor-in-chief of Poets effort that would culminate with a & Quants, an influential website that state-of-the-art “global hub” facility. covers graduate business schools. Every new dean likes to make such Indeed, just take a look at the headline-grabbing promises. These changes at the so-called Magnifi- actually happened. cent Seven business schools, which In all, the school raised more than includes Kellogg as well as Harvard, $330 million. It began offer- Wharton, Stanford, Booth, ing dozens of new courses, Columbia and MIT Sloan. and expanded its global In addition to a continued partnerships and degree commitment to academic offerings. Several new senior Watch Tierney Remick, research, many of these leaders joined the team, and vice chairman of Korn schools now focus on the Ferry’s global Board and a new branding campaign CEO Services practice, more modern skills needed was created. and Jonathan Dahl, for innovation, entrepreneur- All of which has been chief content officer at ship and team leadership, all Korn Ferry, chat with a result of savvy timing, Dean Sally Blount. with a more international fla- because in recent years, vor. High-level executives can kornferryinstitute.com few other forms of higher step out of the corner office education have needed as and spend a year updating much change as the MBA. To be their trade. And the top B-schools are sure, despite some recent softening big into building, erecting gleaming in applications, the MBA is clearly complexes that mirror the high-tech, among the most successful educa- high-paced environment students will tion products of the past 100 years, face in the job market.

58 THE GLOBAL HUB AT NORTHWESTERN’S EVANSTON CAMPUS

But of the M7, only one has Dean Blount. For starters, she’s the first woman to become top dean at any of them, a milestone that can get lost when comparing her accomplishments, which include serving as undergrad dean at NYU’s Stern School of Business, where she helped open an Abu Dhabi campus and secure the school’s first $15 million gift. Not sur- “We’re seeing a prisingly, you’ll find her name tied to places like democratization of the Aspen Institute (advisory board), the World Economic Forum of knowledge that probably Latin America (regional summit co-chair) and hasn’t been true since a huge conglomerate (Abbott Laboratories board member). the printing press.” Byrne describes her as a master strategist with a long-term vision, a deep intellectual and world-class Yet with all this hyper-success fund-raiser who understands the comes nagging concerns that, at value of barnstorming at alumni least in the B-school world, will events. All these traits, he believes, never be enough. In our chat with were critical toward steering Kellogg Dean Blount, we intended to focus into making the kind of changes on the future of MBA programs, most tradition-bound institutions but couldn’t resist asking for her take decades to do. “When you con- insights into the corporate world, sider the constraints of academic the global economy and how aca- institutions, her work is even more demia can shape them both. It was remarkable,” he says. quite an education.

59 “The thing that we need from leaders is a calmness, a confidence that there will be time to solve the problems.”

et’s talk about the along. Organizational intelligence is the ability to see difference between being flows among human systems—to understand that L when you move this piece it’s going to have an effect in business—in your case, down there. When you’re leading at 50,000 feet, the administrative side of which is what I do as a dean, you’ve got to understand when you move one piece other pieces move, and be running B-schools—versus able to predict how that’s going to happen. studying business. Dean Sally Blount: What’s really clear when you B-schools are in a state of flux. work with professors is that it’s quite frankly an IQ What kinds of changes are business. How smart are you? What kind of taste do you have for good questions and how to answer happening? them? But in administration, you learn that leading Blount: We’re seeing a transformation of many an organization isn’t about IQ, it’s about things like industries in the 21st century. And education has social intelligence, emotional intelligence and what not been immune. With the whole development of I call “organizational intelligence.” online content, we are seeing a democratization of knowledge that probably hasn’t been true since the printing press. What do you mean? There is an opportunity now for people in the Blount: Social intelligence is how you manage farthest reaches of the world to get access to course relationships, especially one-on-one and in small content from the world’s greatest universities groups—how you coach people and bring people for free. That’s amazing. Even if you live out

60 in Mongolia and you’re far from any college or separating of great online content. There’s going university, you can actually see some of the best to be a group of more elite schools that continue minds teaching and have access to that. That’s to provide the face-to-face environments, like the profound, that’s powerful, and it’s exciting for the degree programs that we do here at Kellogg. future of humankind. But in your mind, can So we’re in an era of online technology here enhance the versus face-to-face education classroom brand of teaching? and some serious price Blount: Yes, we’re better able to tailor learning to competition. different kinds of minds. It used to be if you were not Blount: Face-to-face face education is expensive good at listening to a talking head in a classroom—if because it’s not highly scalable. You’re putting 60 that wasn’t how you took in learning—it was harder people in a classroom to deliver a course fresh each for you to excel at school. But now, if you’re more time. But people are going to be less willing to visual, there’s PowerPoint to help you track a verbal pay for low-quality face-to-face education if they argument. Or, if you are better able to listen while can get high quality online, and in the long run you do something else (you have a different kind of that means a complete restructuring of the higher attention span), you can listen to the content over education market, where over time we’re probably and over again. At some schools, people frequently go going to see a reduction in the number of face-to- back and forth between going to class and relistening face organizations that deliver education and a to content online.

61 How do you balance the need Tell us your theories on the to be current—keeping up “wormhole decade.” on all the disruptions in the Blount: The first decade of the 21st century was one business world—with the need of profound change, and everybody was acting like it was just normal. Change is normal, but this was YALE SCHOOL OF to teach core principles? fundamentally disruptive change. In the course of MANAGEMENT Blount: Well, let’s be clear, the foundational truths 10 years, for example, the so-called BRIC countries, that social scientists have been uncovering for the which hadn’t even been named at the beginning of Opened: 2014 last century haven’t changed. The foundations of that wormhole decade, were accounting for maybe Cost: $243 million microeconomics haven’t changed. So where we do 5 percent to 6 percent of world GDP, and by the end our innovation in education is in the electives, after of the decade they were nearly 20 percent. you finish the core courses. Big change. Blount: This is a world where we don’t know the new rules yet. Who would’ve guessed that the start-up app called Uber would disrupt the taxi BOARDROOM industry around the world? It happened in such a very short period of time. In fact, Uber was founded UNIVERSITY OF during that wormhole decade, in 2010. It’s industry LESSONS SOUTH CAROLINA after industry after industry. So what we have to DARLA MOORE think about and what we’re talking to our students SCHOOL OF BUSINESS Her career may be steeped in academia, about is this profound decade has led to a decade of but Dean Blount has served for six years on disequilibrium, which is what we’re in. Opened: 2014 the board at pharmaceutical giant Abbott Cost: $107 million Laboratories. Her thoughts on: Can you talk about what that all means for leadership? STAYING CURRENT. Limit the boards you serve on. Check in on company Blount: We have to remember human branches during travel. And study industry organizations can only change so fast. We talk about publications. “I never knew I was going to all the speed and rapidity, but the reality is, large become such a pharma expert,” she says. human organizations move relatively slowly. One of the things we have to remind people is that there CEO SUCCESSION. The transition between is time. And the thing that we need from leaders is new and old CEOs can be six months if a calmness, a confidence that there will be time to the new leader is prepared, but it varies. solve the problems and address the challenges, as “Sometimes you really need two good brains.” long as you’re forward-facing and clear.

DUAL ROLES. Being both a dean and a board director means frequent access to What else should leaders industry leaders and conferences. “I’m of the future know? UNIVERSITY OF TEXAS grateful for the opportunity to be in a lot of Blount: You have to have a clarity of purpose, MCCOMBS SCHOOL rooms with a lot of people. I hear a lot.” which always begins with the customer. Why is your OF BUSINESS SOCIAL MEDIA. She started blogging organization here? Every organization, no matter the Est. opening: Late 2017 sector—government, not for profit, business—has a at Kellogg because “I had things to say— Est. cost: $172 million points of view I felt were important to share customer. They exist to meet somebody’s needs. • with a broader audience.” Note: Questions and answers were edited for clarity and space.

62 Like Kellogg, BOOM several B-schools are opening modern BUILDING facilities that project business environments of the future.

YALE SCHOOL OF MANAGEMENT Opened: 2014 Cost: $243 million

UNIVERSITY OF SOUTH CAROLINA DARLA MOORE SCHOOL OF BUSINESS Opened: 2014 Cost: $107 million

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© 2017 LRP Publications • CD1704-6 Issue No. 31 65 No more. Though still 23 million strong, according to company figures, BlackBerry users are but a fraction of the 1.5 billion users in the total global smartphone market. Newer BlackBerry versions are still widely sold, but finding BlackBerry gear in its prior forms can mean navigating an online wilderness of digital flea markets where sellers—some of suspect provenance—hawk everything from the penny ante, such as earphones for early

speakerless models, to the holy grail: purport- lived without it since. Out with friends one night edly brand-new “unlocked” devices that allow in 2006, staring at their BlackBerries instead Underground members to pop in a SIM card of talking to each other, “one guy said, ‘Crack- from any mobile service provider and reconnect Berry,’ ” Michaluk recalls. “I said, ‘dot com,’ and to their networks. went home and bought the domain.” Webster’s If there’s a safe space for the BlackBerry sealed his fate when it added CrackBerry to the

DOWNTIME Underground, it would be CrackBerry.com. The dictionary as the New Word of the Year. high priest of all things BlackBerry is website On the site, CrackBerry Kevin’s demo videos co-founder Kevin Michaluk, who reigns as are catnip to the BlackBerry Underground, and CrackBerry Kevin. “It was my first love in the he’s penned the urtext of the Underground, smartphone game,” says Michaluk. “CrackBerry: True Tales of BlackBerry Use and The kid from rural Manitoba almost missed Abuse,” a book that documents the primal expe- his date with the device, which became well riences of early adopters who turned the idiom known for its iconic keyboard that types with a “all thumbs” into the smartphone industry. reassuring clicking sound. “Second day of work, A major goal of Underground members is somebody from IT came down and gave me a acquiring backup devices. It takes effort. But for BlackBerry,” he says. “It was this ugly thing. I the thumb-driven, there’s no other option. “I didn’t touch it for two weeks. Then I started to strongly prefer the BlackBerry—and 95 percent use the darn thing, and I’m like, ‘Oh my god! of the reason is the keyboard,” says John W. How did I ever live without this?’ ” And he hasn’t Rutledge, president and CEO of Oxford Capital Group, one of the leading hospitality real estate investment and development companies in the A BlackBerry U.S. “I run my life with hundreds of e-mails a day with team members internally and exter- Roller Coaster nally,” he adds. “I am just dramatically more productive and efficient when I’m typing with Peak-BlackBerry Era. BlackBerry has my thumbs on this keyboard.” more than 41 million users in 2010. While he’s all about taking calculated risks Turning Point. By end of 2010, in business—his current project will reframe BlackBerry sells only 17 million units Chicago’s skyline around a new 56-story resi- while other smartphones sell dential tower—Rutledge has minimized the 250 million, as firms encourage risk of being caught without his BlackBerry employees to use their own phones. Classic. “I bought several of them and have Left Behind. By 2016, BlackBerry has 23 mil- some backups in storage should they discon- lion users, a 45 percent drop from 2010. tinue them.” Second Wind? In 2017, BlackBerry unveils Stockpiling reserves is de rigueur. Riding an KEYone, a device with the classic keyboard elevator in New York City recently, Michaluk but running an Android operating system. commented on his neighbor’s BlackBerry 8700.

66 Briefings On Talent & Leadership Put to the Test BlackBerry fans love their keyboards. Our author, a BlackBerry loyalist but also a user of other devices, tried three devices and made an interesting discovery.

THE TASKS: Type, “The quick brown fox jumps over the lazy dog,” which uses all letters in the English alphabet, and calculate a 15 percent tip on an $89 bill.

THE RESULTS: (in seconds)

0 2 4 6 8 10 12 14 16 18 20

BlackBerry Bold 9900 Typing 12.2

Tipping 7.7 THE CONCLUSION: iPhone 6s Typing 18.5 Though the results are unscientific, Tipping 4.3 it appears writing speed may be faster on BlackBerry’s trusty tactile LG Android Tablet Typing 14.1 keyboards. But even longtime users may find calculating to be faster on Tipping 5.4 other devices.

The owner of the 2006-vintage device shot back, “Kid, BlackBerry is about to reward loyalists with a new I love it so much I have 12 more sitting in my desk, so device that adds a big screen and Android apps. It’s a if they break or they quit selling them, I still have this head turner, Michaluk says, light years ahead of the thing because I love it that much.” ugly duckling that first won CrackBerry Kevin’s heart. Facing the future without a BlackBerry is devastat- “It looks awesome,” he says. ing. Just ask Kim Kardashian. The world’s highest- Being busy refashioning Chicago’s cityscape, profile BlackBerry user, Kardashian scoured eBay for Rutledge hadn’t heard the news. When he did, the years to snag replacements for her discontinued Bold. developer cut to the chase: “Is the new one going to Her world came crashing down last summer. “Sooo my have the keyboard that we like? As long as I have my BlackBerry Bold died. I can’t find any more on eBay,” real keyboard, then I’m happy.” the reality TV star tweeted. “Reality is starting to set No worries, says Michaluk. “Your thumbs are right in and I’m getting sad.” there as you’re typing. It felt very BlackBerry.” •

Issue No. 31 67 The Cheesy

From top to bottom:

DOWNTIME Colston Bassett Stilton Business (cow, England); Casatica Di Bufala (Buffalo, Italy); Délice du Poitou (goat, France); Époisses de Bourgogne (cow, France). Lunch Opposite: Juvindale (cow, France); Mimolette Vieille (cow, France).

BY SHANNON SIMS

BRIE TO CHEBRIS, BE READY TO KNOW YOUR CHEESES.

magine yourself sitting down to a business lunch at one of the more esteemed res- Itaurants in Milan or Paris. Inside, the walls are lined with premium wines, the tablecloth is ironed, the silver polished. You peruse through a wine list with your colleagues, and then, just when you thought the decision-making was fin- ished, a waiter pulls up beside you with a cart of 50 different cheeses. With a napkin draped over his forearm, he asks you to choose a few. The trouble begins. To you, the cheeses all look pretty much the same, like stacked beige and yellow wedges. Not only can you not tell the difference between them—or why some are priced more than others—you can’t even identify what language their labels are written in. Époisses? Sottocenere? Chebris? Harbison? Sud- denly, despite years spent refining your palette

and developing an acumen for fine wine, you Botero / Styling: Daniel Cordero Randall Photography: feel like you’re out of your element.

68 Briefings On Talent & Leadership DINING

You aren’t alone. More diners are finding themselves in similar bins, overwhelmed by snooty-sounding cheese names while trying to order a cheese plate at a fine restaurant. In fact, many people become so flummoxed with the cheese choices that they often end up punting the choice to the waiter. “If you’re out to eat with people you’d like to im- And that’s a shame, because cheese is going press, it’s definitely in your interest to know how the way of wine. Justin Trosclair, one of the top to navigate a cheese menu,” says Trosclair. cheese experts in the world and a former winner The easiest and tastiest way to break into of the Cheesemonger Invitational, notes that the world of cheese is by visiting a well-stocked over the past couple decades, “the cheese market cheese shop with well-trained cheesemongers has gotten a lot more sophisticated and knowl- (yes, that’s what cheese curators are called). If edgeable, and as a result, the cheese industry’s you are lucky enough, you’ll find your way to standards have risen.” Murray’s in New York, La Cave The cheese industry has experienced a recent à Fromage in London, Formaggi boom, and these days cheese is big business. Ocello in Sydney or De Kaaskamer DID YOU KNOW... According to the Specialty Food Association, in in Amsterdam. In the store, you’ll Like wine or even beer, there the United States today, the average American be overwhelmed by options, so are now magazines aimed at the cheese lover. Pick up a consumes 34 pounds of cheese a year, repre- you should focus on finding a type subscription to Culture: The senting a more than 40 percent increase in cheese of cheese you enjoy. Do you like Word on Cheese or Cheese consumption over the past 25 years. In the U.S. the tongue-tingle of raw cow’s Connoisseur to make learning about cheese easy. alone, the specialty cheese market hit $17 billion milk cheeses, or the crystal-like in 2015, growing nearly 5 percent on the year crunch of aged hard cheeses? Do over the past few years. And globally, the cheese you prefer your cheese pure and Most major cities, from Denver to Dubai, have at least one market is expected to exceed $100 billion by 2019. light like fresh goat cheese, or great cheese shop where a The increased demand has, of course, put stinky and heavy like gooey triple- cheesemonger is happy to help interested cheese newcomers cheesemakers around the world to work, and as a cream brie? Sample liberally, and learn more. result, the number of artisan cheeses consumers if you find one cheese you love, can choose from in restaurants continues to in- sample the other cheeses from At the 2016 World Cheese crease. And these cheeses are not the deli-bound that cheesemaker. And be sure Awards, a Norwegian options of the past. Today, some of the cheeses to try the expensive stuff, since cheese called Kraftkar took first available in fine restaurants are aged for years in that’s often what shows up on fine- place. At the 2016 American Cheese Society Awards, a caves, some are flavored with truffles and coffee dining restaurant menus. Take Wisconsin cheese named Little grinds, and some are sweeping awards around notes, and even consider buying a Mountain won best in show. the world for their complexity of taste. cheese journal, which, like a wine Not surprisingly, the prices are starting to journal, helps cheese lovers keep Two of the most expensive match the effort, with some even clocking in track of their favorites. cheeses in the world are anywhere between $50 to $500 per pound. It “Just like no one expects you Swedish moose cheese and Serbian donkey cheese. Both may sound like caviar pricing for cheddar, but to know every wine on the menu, cost around $500 per pound. from the grass the cows eat to the washing of the no one expects you to know rinds, cheesemaking has become a fine and highly every cheese,” observes Trosclair. profitable art. His advice: “Stick to styles, just like you might All of this means that now is the time to go with wine, because having a basic knowledge of ahead and brush up a bit on your cheese knowl- styles will go a long way.” Especially at that next edge before you sit down to that business lunch. expense-account meal. •

Issue No. 31 69 Summer Reads, Summer Insights

DOWNTIME Our list of paradigm-shifting business books.

BY CHRIS TAYLOR

he most agile leaders never want to laziness, but Tim Ferriss’ best- selling smash was actually stop learning. They’re always facing new a guide for supercharging challenges, developing new skills and productivity. By multiplying T output during work hours, making fresh connections. It’s a mentality that lets you enable a richer and more them develop great strategies and motivate people. rewarding life. “Tools for Titans” could be Fortunately, summer provides even the hyper- considered the next phase of that movement, talking to the busy with rare beach breaks to do some quick rich and famous about spe- reading of business books that can offer some cific steps to enable extreme achievement. Behind every key insights. Nearly everyone knows about “The successful individual, there Effective Executive” (first published 50 years ago) are mundane matters like how they organize the workday, and “The 7 Habits of Highly Effective People” how they maximize energy, what books they read for (25 million copies sold and counting), so we asked inspiration—and Ferriss has several executives for their recommendations on made it his mission to unearth all these microsolutions. books—some new, some not—that made them One loyal reader: Kevin more agile. Gibbon, CEO of shipping start-up Shyp. The tome is “filled with the best advice Own It: The Power of leadership styles of yore. on how to reach peak perfor- Women at Work One of the book’s fans: mance—it covers everything Alexandra Lebenthal, Wall from how to deal with haters Sallie Krawcheck Street bond queen and head to making the most of your Crown Business, 2017 of Lebenthal & Co. “It’s great morning routines,” he says. The usual CEO stereotype is advice not just for young “As CEO of a fast-growing very Type A—someone hard- women starting out, but for start-up, I find the gems on nosed who takes no prisoners. experienced businesswomen finding and cultivating top For a woman to succeed in like myself,” she says. “[Kraw- talent incredibly valuable.” that environment, the conven- check] isn’t afraid to take tional wisdom went, they had failure and make it part of her to be just as hardcore. brand in a positive way.” Micro-Resilience: To which Sallie Krawcheck Minor Shifts for Major says: no, no, no. The former Boosts in Focus, Drive, CEO of Smith Barney, head Tools of Titans: The and Energy of Merrill Lynch, and chief Tactics, Routines, and financial officer for Citigroup Habits of Billionaires, Bonnie St. John and says that women are actually Icons, and World- Allen P. Haines perfectly suited to a changing Class Performers Center Street, 2017 business world. Women When we seek to improve tend to be more long-term- Tim Ferriss our lives and careers, we tend oriented and risk-aware, Houghton Mifflin to look for huge, dramatic and they value collaboration Harcourt, 2016 solutions. But what if the real and communication over “The 4-Hour Workweek” answer were obtained by the command-and-control may sound like a manual for looking small?

70 Briefings On Talent & Leadership READING LIST

That’s the conclusion of his old Plymouth Valiant. shares his obsession with former Paralympian (and Rhodes As a result, Knight faced all the rapid change—and the proper Scholar) Bonnie St. John and typical start-up problems—from response to it—a highly useful co-author Allen Haines. By dig- scarce funding to the opposition skill for our tumultuous times. ging into the latest neurological of powerful, established players in The book’s original iteration and physiological research, they the field—before hooking up with may have come out in 1996, but found that making seemingly famed track coach Bill Bowerman Grove’s book couldn’t be time- minor tweaks in our daily rou- and creating the success story we lier. He writes about the critical tines—what we are focusing on, know today. nature of “strategic inflection what we are eating and drinking, Someone who couldn’t stop points”—those moments of how much we work or how much turning the pages: Charlotte massive change that can either we rest—can actually lead to Jones Anderson, the executive kill a company or spur it to gigantic results. VP of the Dallas Cowboys and greater heights. St. John’s science-based, daughter of famed owner Jerry Lynx Equity president Brad hour-by-hour tips can cumula- Jones. “Many of the words of Nathan loves Grove’s “para- tively lead to impressive per- wisdom that Phil Knight gained noid” take on modern business. formance boosts, says Bernard inspiration from, and motivated “I worry all the time,” he admits. Tyson, chair and CEO of Kaiser others with, are very similar to “In order to fix problems, you Permanente—especially in milieus those my father has preached to need to be worried.” ● like Tyson’s, healthcare, where me my entire career,” she says. workforces can use all the resilience they can muster. Only the Paranoid Survive: How to Avoid Shoe Dog: A Memoir by the Crisis Points That the Creator of Nike Challenge Every Company Phil Knight Scribner, 2016 Andrew S. Grove Almost everyone knows the Crown Business, 1999 edition name of the iconic founder of A book doesn’t have to be Nike, but not many know the spe- new to deserve a place in cifics of how Phil Knight created your summer beach bag. So the athletics giant. The whole consider this classic by the $30 billion operation started with late Andy Grove, former chief 50 bucks borrowed from his dad of Intel, the world’s largest to sell shoes out of the trunk of chipmaker. In it, the author Randall Cordero Photography: Randall

Issue No. 31 71 Briefings / 1900 Avenue of the Stars, Suite 2600 ENDGAME Additional copies: [email protected] An Idea

Worth Selling Los Angeles, CA 90067 BY JONATHAN DAHL

hen was the last time somebody told you he or she

worked in sales and you just fell out of your seat impressed? Or asked for an autograph? Let’s face

W Circulation Customer Service: +1 (310) 556-8502 Reprints: Advertising: Stacy Levyn +1 (310) 556-8502 it, as technology continues to be the steady drumbeat of business, the world belongs to the innovators, the entrepreneurs and the devel- opers who can create the toys of the future.

And yet there’s something so true about a line from “Death of a Salesman”: Tiffany Sledzianowski +1 (310) 226-6336 The only thing you got in this world is what you can sell. Written decades ago, it still makes plenty of sense—after all, there’s no point creating some great gadget or software if no one knows how to sell it.

Which brings me to some recent white papers Take note, that’s ahead of engineering, finance, even IT. you can find on our website (kornferryinstitute But maybe that’s because most people don’t .com) that suggest companies have forgotten really understand how sales jobs have changed. this. Or at least they’re drifting pretty far away Salespeople once could educate people about from sales-centric leadership. In a paper by a product or service to help close the deal. But Rick Sklarin, senior client partner in our Global consumers today can get almost all of that from Technology Industry practice, social media and Google. “It’s we learn something kind of difficult for a salesperson to startling: Of the 10 top pub- surprise a customer with a fact licly traded U.S. tech firms, or feature,” says Bill Sebra, chief which combined sell more operating executive for Korn than $850 billion in gadgets, Ferry Futurestep. software and services, only So today’s true “salesperson”

one has a CEO with a primary is more consultant-like, with a inks, in a sustainable and environmentally responsible manner. soy-based and paper recycled power, solar utilizing Produced PRINTED IN THE U.S.A. background in sales. Pull the wide range of expertise to help telescope a little farther back, buyers solve problems. This and you find that only eight of is all more about relationship the top 100 tech CEOs do. Only building and the ability to about a third have any sales Most people don’t get help from throughout the experience at all. understand how firm—in effect, not just closing Obviously, early-stage sales jobs have but also forming the deal. This tech firms need leaders who changed. is just the latest example—and come from the innovation and take note, as it’s a theme in this production sides to develop all new devices and issue’s cover story—of how agility has become such software. But the firms in this survey are a long a core skill. way from the garage. Wouldn’t it make sense to All of which kind of smothers that old-fashioned have some CEO benchwarmers who know how to image of a one-dimensional Willy Loman or even sell the stuff? a slick Madison Avenue salesperson, and makes

our other new research—suggests that sales as an development in Silicon Valley. And every bit as 1 949 - 8365 important skill set just keeps moving off everyone’s important. The trick now is convincing companies John Swope/The LIFE Images Collection/Getty Images Collection/Getty Images LIFE Swope/The John radars. That includes all the new job hunters. to elevate the potential future for top sales execs. According to a survey of more than 1,000 hiring But for that to happen—well, it may take a bit of

leaders, the hardest job to fill these days is in sales. a sales job. • Photo by:

72 Briefings On Talent & Leadership National Harbor,MD October 1–4,2017 LEADERS' SUMMIT GLOBAL BOARD 2017 PURPOSE INTHE BOARDROOM PROFITAND BALANCE CULTURE RE:

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invent Register todaytosave $1,000. NACDonline.org/Summit Issue No. 28 No. Issue D KORN FERRY BRIEFINGS TALENT + LEADERSHIP HIRING: HOW 70 IS THE NEW 50