The Corner Office

Early in my career, I mean decades ago, I had a boss from hell. Oh sure, I’ve had lots of dysfunctional bosses. I was a pretty dysfunctional boss myself. But this guy was different. I’m talking serious lunatic stuff here. It was so traumatic that I sort of blocked it out of my memory. But as is often the case with tragedy, there was also a comic aspect and maybe even a lesson to be learned. 

Let me set the stage here. John - we’ll call him John - ran a regional office for a huge multinational technology company based in Asia. That’s where our products and services were developed. These folks in Asia had no idea what they were doing in the U.S. market. I mean no idea.

John’s boss and the rest of the company’s U.S. management and headquarters were in another state - California. John’s boss was a savvy executive who made it big down the road, but the rest of the U.S. folks were, well, they were idiots. And they were our principal interface to the folks in Asia who were clueless about the U.S. market. (more…)

Picture this: You are a top executive at one of the biggest technology companies on the planet. You spent 30 years working your tail off, climbing the corporate ladder, building your reputation, and it all paid off. You’re set for life; you can retire tomorrow and never have to worry about money as long as you live.

So what do you do? You leak all kinds of inside information on upcoming earnings releases and a high-profile restructuring and spinoff to a friend at a hedge fund who you know is going to illegally trade a million shares on the information and let another hedge fund manager in on the fun, too.

But you’re caught red-handed on tape by the FBI. Poof, it’s all gone. Just like that.

So, can you picture that happening to you? Of course not; neither can I. But it allegedly happened, and not to just one guy, but two. 

One is former AMD CEO and Motorola president Hector Ruiz, who yesterday agreed to step down as chairman of AMD spinoff Globalfoundries. Ruiz, apparently caught in the FBI snare, cooperated with the investigation and has not been charged.

The other is Bob Moffat, an IBM senior VP who has been mentioned as a possible successor to IBM CEO Sam Palmisano. Moffat, who was arrested by the feds a couple of weeks ago and charged with conspiracy to commit securities fraud, ended his 31-year career at IBM on Friday.  (more…)

On Friday the SEC arrested and charged a billionaire hedge-fund manager and five others - including high ranking executives from IBM, Intel Capital, and Mckinsey & Co. - with insider trading resulting in $25 million in illicit gains.

While it’s tempting to write this off as the work of a few greedy individuals, I don’t believe that’s the case. If the allegations are true, it would appear that the rampant conflicts of interest and insider trading of the tech bubble is still alive and well. The only difference is that, instead of investment banks, the instigators are now hedge funds.

Just look at the breadth and depth of the allegations that the feds used wiretaps and informants to uncover; this was no Mickey Mouse operation:

• It involves Robert Moffat - a senior VP and prime candidate to succeed IBM CEO Sam Palmisano, Rajiv Goel, a managing director at Intel Capital, and Anil Kumar, a director at McKinsey & Co.
• It involves confidential, inside information about earnings and acquisitions involving Google, Intel, Hilton, Clearwire, Sun, and Polycom.
• The linchpin is Raj Rajaratnam - a billionaire hedge-fund manager and former president of investment bank Needham & Co.   

Insider Trading: Past, Present and Future

(more…)

CEOs say the darndest things. I don’t care what industry you’re in or how big or small the company, every CEO I’ve known has possessed the same two qualities: smart and quotable. Why that is, I don’t know. But funny, poignant, or insightful, you’re not likely to forget their pithy quips. You might even learn something. 

Here are nine from my career that I’ll never be able to get out of my head. The quotes may not be exact - some of this occurred a long time and a lot of brain cells ago - but the meanings are accurate. If you like these, help me come up with a tenth quote and I’ll post the best ones and pick a winner:  (more…)

Few managers would question that ”entitlement” behavior in the workplace is on the rise or its potentially damaging affect on organizational effectiveness and productivity. While many dump this problem at the feet of the “me generation,” I think that’s just a convenient way to point fingers and lay the blame elsewhere. 

On the contrary, my observation is that this behavior has been an ongoing trend for decades and multiple generations. But it’s not just an employee problem; it’s also a management problem.

CEOs, executives, and senior managers have struggled with the challenges of holding folks accountable and meeting performance and behavioral issues head-on for generations. And over time, managers seem to be increasingly less comfortable with these critical aspects of their jobs.

Moreover, this unwillingness to hold people accountable appears to be an epidemic that starts at the top - with investors and boards - and follows the leadership chain all the way down to the line manager level.  (more…)

Yesterday the Wall Street Journal reported that the Obama administration’s pay czar - Ken Feinberg - is planning to revamp compensation packages for executives at “bailed out” companies by shifting as much as half their cash salaries to stock they can’t access for a few years.

The move will only apply to the 175 most highly compensated individuals at seven firms, including AIG, Bank of America, Citigroup, GM, and Chrysler. And while the Federal Reserve is expected to make its own recommendation on how thousands of bankers should be compensated, the Obama administration would like Feinberg’s determination to be viewed as a “best practice” for executive compensation, according the WSJ.

Sure, I have mixed feelings about this unprecedented government intrusion into the private sector. And the devil is certainly in the details in terms of the specific nature of the stock grants or options (still TBD) and the type of behavior they encourage. But what struck me most about Feinberg’s work is that he seems to be proposing a model similar to what the tech industry has been successfully using for decades. (more…)

If you’re not pushing the envelope, you’re not going to get anywhere. If you’re not “wiping out” from time to time, you’re not learning anything. That goes for everything in life, including business. That’s a premise you can take to the bank.  

If you know anything about the likes of Steve Jobs, Bill Gates, Andy Grove, Michael Dell, or Larry Ellison, you know they haven’t always been congenial and pleasant to be around, especially earlier in their careers. There’s a learning curve for everybody.

But these days I’m worried. Worried and concerned. I’m concerned that we’ve become so politically correct that there’s no room for the learning curve. I’m afraid that we’re dumbing down the workplace to the point where folks can no longer push the envelope. I’m concerned that it’s affecting our ability to operate and innovate at peak levels. Here’s the problem:  (more…)

Like many extraordinarily talented people, Howard Stern is as dysfunctional as they come. But it just so happens that he likes to air his organization’s dirty laundry on the air on Sirius XM satellite radio, which is both wildly entertaining (which may or may not be the reason he does it) and provides about the best lesson on how not to manage you’ll ever find.

If you think this is so over-the-top that it’s lesson-proof, think again. I actually had one or two CEOs who were at least as abusive, although not as disorganized, as Stern is in the interaction below. And I was a terrible manager in my early days at Texas Instruments. Don’t believe me? Go ahead, ask some of my former employees; they’ll tell you. On second thought, don’t do that, it might bring back the trauma.

Anyway, here’s a recent knock-down drag-out between Howard Stern and engineer Scott Depace, producer Gary Dell’abate, and Jason (I don’t know what Jason does), with a lead-in from Howard 100 newsman Ralph Howard and occasional chime-ins from on-air sidekicks Robin Quivers and Artie Lange.

This is a priceless lesson in how not to manage; see if you can count the management mistakes:

Ralph: “Howard 100 news has the audio tape of negotiations between these two intergalactic warriors, stay tuned …”

Howard: “What do you mean, you have audio tape of Tim and Riley?”

Ralph: “Absolutely, yes.”

Howard: “How come Tim doesn’t give that to me? That’s top priority!”

Robin: “You have the actual negotiation?”

Ralph: “Yes.”

Robin: “Wow.”

Jason: “I gave it to you this morning.”

Robin: “Everybody gives you everything.”

Howard: “Where is it?”

Jason: “Scott has it.”

Howard: “No one shows it to me.”

Jason: “I gave …”

Howard: (Yelling) “Gary, get in here.”

Gary: “Hold on, hold on. This is the first I’m hearing about it now. Jason said he gave it to Scott this morning.”

Howard: (Angry) “Where is that ‘bleeping’ nincompoop Scott keeping material from me that ‘bleeping’ bald ‘bleep’? Why do I have him in my life? Scott, get out of my life. Where is my tape? You ‘bleep’.”

Scott: “Yes, I’m a ‘bleep’.” (more…)

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It’s no secret that GE CEO Jeffrey Immelt is on President Barack Obama’s economic advisory board. And that GE is the parent company of NBC Universal. It’s also well known that NBC News is in bed with President Obama, who even joked about it at a recent media event:

“A few nights ago, I was up tossing and turning trying to figure exactly what to say. Finally, when I couldn’t get back to sleep, I rolled over and asked (NBC News anchor) Brian Williams what he thought,” Obama said.

But does that constitute a conflict of interest for either GE or President Obama?

How about the fact that GE Capital received a federal loan guarantee of $139 billion via the Wall Street bailout?

Or that Immelt is a member of the board of the New York Federal Reserve, formerly headed by Obama’s treasury secretary, Timothy Geithner?

Or, and this is the big ticket item, that GE stands to make billions off the Obama administration’s Cap and Trade and Alternative Energy initiatives? (more…)

It’s Friday before a holiday weekend, but that’s still no excuse. If you’re still working and reading, I’m still working and writing. Besides, where are you gonna go for a pithy business blog on a day like today, huh? That’s right, The Corner Office. So, here’s your reward - for both of my readers today:

Top 10 “Short Business Lists”

1. Safe banks. Actually, I like TD Ameritrade … and maybe Wells Fargo. 
2. Bug-free software. No such thing.
3. Profitable airlines. Southwest. Nope, not Ryanair.
4. Underpaid big-company CEOs. Hmmm.
5. Canadian technology companies. Research In Motion.
6. Failing fast-food companies. ???
7. Biotech firms researching new antibiotics. Lousy ROI; too bad for us.
8. Management gurus with management experience. My pet peeve.
9. Internet resellers that communicate over the Internet. I mean real-time. Seriously.
10. Out of work lawyers.

Okay, now it’s your turn. Got any short business lists? Come on, try it; it’s fun.

In any case, have a great Labor Day weekend!