Archives for posts with tag: Leadership

The Wall Street Journal just had an article about a new staffing trend some companies are using, Blind Hiring. The idea is to remove key information from resumes, like schools, past employers and even prospects’ names. The hope is this will reduce built-in bias that many managers have to favor people from their alma mater, or from a trendy tech firm, or to not chose equally qualified women versus men. These firms, like parts of IBM, are sometimes inserting a mock project into their process to try to focus on people’s real talents not words on a resume.

As many of you know, I have strong feelings about how, in many firms, Human Resource people have taken on too much power and hiring is a good example. So what are some thoughts I have on how to hire people?

  1. The hiring manager should research the job market themselves and write the job description or ad. When this happens the manager knows more about the role, skills required and pay than any HR person would ever know.
  2. My old boss and successful business owner, Don Brown, had some very unique things he would do when hiring people. And since he hated to read, resumes were not a part of his process.
    1. He would sit and talk to someone face to face and alone to get to know them. When I was “interviewed” for a senior financial role we talked about my son joining Indian Guides, Shetland Sheep dogs and family. No technical stuff at all. He was interested in me, as a person, not as a young CPA.
    2. For a critical senior job that I helped on, Don Brown met the prospect 5 times in the office, once over lunch and once with the person’s spouse for dinner. It resulted in a great hire.
    3. When he could, he would watch the job prospect walking back to the parking lot. Did they still seem to have energy and pride in their walk or were they just acting that way in the interview.
    4. Don Brown tried to hire quality people which he knew meant they would probably be quality employees. If you spend the time to get to know someone, the odds of a good fit increase!
  3. When I have followed most of these steps, I ended up with excellent, loyal and long-time employees. It is all about spending time to get the know the person, not being impressed with what is on a resume.


Reminder: my book, The Business Zoo by Brad James is now available on as both a paperback and an e book.

The Wall Street Journal recently ran an article about the engine emission crisis at Volkswagon (VW). Senior executives of VW acknowledged that their firm had a “culture of tolerance for rule breaking” that lead to this “chain of mistakes”. Although the article did not name exactly who ordered their engineers to install the software to fool the tests, the article did state that it found no evidence that “VW executive or supervisory Boards were involved in the fraud”.

Yeh. Heard that one before. After British Petroleum (BP) had the disastrous oil spill in the Gulf, a top writer from Fortune magazine stated that BP’s long time focus on cost cutting versus safety goes back directly to the Board of Directors. The Gulf spill was proceeded by several major safety events including a huge explosion in Texas that killed a dozen workers. All organizations look for guidance or direction from the top and a Board is the ultimate top. It appears that maximizing profits through cost cutting was a top priority over safety for BP and its Board.

At my old firm, USG Corporation, every meeting, even the Board meetings, started with a review of safety. This goes back to when USG started as a gypsum mining firm. Major accidents, especially deaths, are reviewed in often grisly details. Senior people, including myself, would attend safety dinners when a plant reached an accident free milestone. Safety was a core value at USG Corporation.

Sadly in most of these disasters like BP and VW often a few, token senior people are fired but with huge severance packages. But a lot of staff or line engineers at these firms lose their job and often their livelihoods because of their presumed role.

At VW, the Board and the senior executives looked the other way or showed a tolerance for rule breaking or it would not have occurred. And  German car companies are known for their excellence in their engineering and engines. That makes this all the more unbelievable to me.

In my view, senior executives and Board members must be held to higher standards than they are and at times, they need to bear the blame and responsibility for not focusing on what is right.  Read the rest of this entry »

A most unlikely source, the AARP Bulletin, gave me the inspiration for this blog. I say unlikely because it is not thought of as a traditional source of business wisdom. Retirement and aging wisdom, yes.

This article was titled “It’s never too late to learn” and dealt with a newer corporate trend of assigning younger people to help their older colleagues learn things. This is often called reverse mentoring and can range from explaining social media, such as how to use Twitter, to building better relationships with the incoming millennials and Gen Xers. As I read and thought about it, I realized that I have been informally involved in this process over the years with many of my younger mentees.

An overall concept, in which I strongly believe, is that Mentoring works best when both parities are, at least, benefiting from the process and, at best, when both parities are learning from each other. The benefit can be as simple as the the satisfaction or pride a mentor gets when the mentee gets a desired promotion. But the better benefit is when the mentor actually learns something themselves. It is not usually some technical thing, but rather some softer issue. Here are a few real life examples (without full names) that come to mind.

Y, a young, female, Hispanic manager in a large distribution firm from whom I learned what it’s like to be a double minority in a traditional old-line firm and how to deal with it.

M, a young, male business owner, who shares with me both the joys and frustrations of running his own small business. He has no college degree, yet over these last few years he has earned the equivalent of an MBA at the school of hard knocks.

J. a young, female founder of a service business, has such passion for her trade and personal drive to succeed that she could qualify to teach a graduate courses in Leadership or Entrepreneurship.

So if you have not tried mentoring, try it. And if you do mentor but feel your efforts have been mostly one sided, then try harder and learn to listen and learn from your mentee. It is not too late to learn something valuable and wonderful!

The Wall Street Journal just had an article about how the federal regulators are trying to figure out if the Banking industry has some inherent flaws that somehow tie to a Bank’s culture. The regulators are worried that the specific crimes or security violations we read about are not just isolated examples, but relate to deeper issues in the Banks. But the regulators are having trouble figuring out how to define each Bank’s “culture”. Even the Banks themselves are hiring legions of Consultants to help them define their own culture. One well known Bank created a “happy to grumpy” ratio of their employees as one way to measure culture.

Well, if they had only asked certain retired Chief Financial Officers, like me, who had worked with Banks, they could have learned a few things in a hurry. The reason I chose “retired” CFOs is that they can be more honest now than when they worked for companies who needed the Banks to survive or grow.

Wall Street Bankers are certainly a unique breed. In my book, The Business Zoo, I have a lot of stories that relate to Bankers and their culture. A few of these are as follows:

“It’s only Business, not Personal.” This means a Banker can lie to you, but because it’s about business, he is not a bad person. Heh.

“I would sell my mother for an eight of a point!” This means that in a large deal, even a very small extra fee or interest charge, is worth doing almost any unthinkable thing to achieve. This can include breaking laws or client confidentiality or whatever. That quote is word for word from a senior U.S. banker.

“Dining with Wolves, Rats and other adversaries”.  Does this one really need more of an explanation? Let me just say I admire and respect wolves.

Bankers also have the same trait that relates to many Consultants. They believe they are smarter or better than the rest of the world. Even in my youth in public accounting, at the now defunct Arthur Andersen & Co., we were taught this. It becomes part of the ‘Culture” that these firms use to distinguish themselves from others. But it can also lead to trouble.

But the most fascinating aspect of this WSJ article was how both Bankers and their Regulators are apparently having trouble identifying Culture and are even hiring outside consultants (often with their own problems) to help!

So here are a couple of tips about Culture from my final chapter in The Business Zoo. 

Culture and Leadership are the flip side of each other. Study the Bank’s past and current leaders and you will learn about the firm’s culture as well. The good, the bad and the ugly.

Culture, as defined in the Royal British Columbia Museum, is a complex system of tools, language, arts and beliefs that help humans survive. To determine any organizations’s culture you must spent time studying their systems, procedure, policies, whether written and unwritten, or formal or, more importantly, informal. To study and define a bank’s Culture, Regulators will need to invest a lot of time and hard work.

Or you could hire a few retired CFOs who have spent decades around Banks!

My 14 year old grandson with his younger sister were in Chicago this fall for a visit. He and I went to lunch for his favorite food, snow crab legs, while my wife, Tricia, took the grand daughter shopping on Michigan Avenue.

While watching my grandson devour his second order of snow crab legs, I am trying to engage him in a conversation. Conversations with teenagers are always a challenge.  I cover one of his favorite topics, the latest super hero movies-is the new Thor (God of Thunder or something) movie the second one in the series? No, Grandpa Brad, he politely says, it is the third. Who would know? Are D.C. and Marvel movies and super heroes the same group? No, again. I should have known since decades ago, I read comic books!

I decide to try to teach him something about business using one of his other favorite subjects, Minecraft. For those of you not familiar with Minecraft, it is described, on the source of all wisdom, Wikipedia, as a sandbox indie game involving building structures in a 3D generated world. Like most video games it involves exploring, acquiring resources, combat and survival. Which really does sound like business or The Business Zoo! Any parent or grandparent with a teenage boy especially knows about Minecraft. It actually seems more civilized and almost educational compared to most video games which focus on zombies or flying birds attacking hungry pigs. It was originally developed by a Swede called “Notch” and has a cult like following.

The week before my grandson arrived in Chicago, Microsoft, the software giant of Bill Gates, agreed to buy Minecraft for a couple billion dollars. “Notch” will not be part of the new business but will walk away with a lot of marbles and a lot of swedish krona.

I, sadly, tell my grandson to enjoy Minecraft now because it will either become boring to its fans or it will disappear once Microsoft gets their hands on it. Why he asks me? I tell him the sad corporate truth. Big, sleepy giant firms like Microsoft love to buy smaller, trendy niche companies like Minecraft but they almost always destroy the unique Culture and Leadership the smaller company had. The big firms can not help themselves. They want to make the new, smaller firm just like them and by doing so they ruin it. Microsoft has been around almost 40 years and they believe they are much smarter than the people at 4 year old Minecraft. As I have written before, within three years of a takeover like this, two thirds of all the senior and upper level people at the acquired firm, Minecraft, will be gone. With the founder leaving here it will even be accelerated.  Sorry, grandson, that’s the way business and deals work.

My grandson shrugs and he goes back to explaining to me the difference between the Justice League (D.C. Comics) and The Avengers (Marvel Comics).

Happy New Year to all!

We have written a lot here about Culture and Leadership as the over riding and most defining aspects of most organizations. Now I am reminded of this again as the news media covers in great detail General Motors’s recall issues.

When the new GM CEO, Mary Barra,  discusses what apparently happened in countless internal GM meetings, she refers to the GM Nod. This is described as when everyone seems to nod their head as if they agree Something must be done, but then Nothing happens. She also is quoted discussing a similar issue, that GM, at times, seemed to have a “troubling disavowal of responsibility” . To help resolve all of this, she vows to upend the corporate culture responsible for this “pattern of incompetence”. To this I add, Good Luck!

General Motors has been around a very long time. For much of that time they were one of the greatest corporations in the world and, along with Ford and Chrysler, a wonderful training ground for decades of leaders inside and outside the auto industry. During that time, the Culture of GM was formed, in part by the Leaders. They were the best and they believed their way was The Only Way. During the last twenty years with the invasion, as they called it,  of “foreign cars” from Europe and Asia, things have not been as rosy. But, trust me on this one, the Culture of GM stayed essentially the same. If you read reports of the GM bankruptcy, the outside experts that the government sent in to “help” GM were amazed on how insular and isolated the GM leaders were. So a whole generation of them were retired or fired. But the Culture stayed on.

But the issue is not just with GM. As I consult or mentor young people, I hear similar stories. Two hour meetings of 20 people from four or five different operating and staff  groups that accomplish nothing except to hear people talk. Sometimes at the end of one of these meetings, some “Leader” will announce that is was great that we talked about this! Today, especially in large organizations, no one wants to show initiative or take responsibility for anything because they are Afraid. And as you have learned by now, fear should have no space in business or in a zoo!

The answer to this at GM and elsewhere is not first in trying to change the culture. It should be the leaders, who act, encourage and reward others to take personal initiatives. And to assume responsibility. I was taught, years ago, that if I was in any way responsible for something, I had to assume that responsibility and not try to Nod it off to others.

The last Chapter of my book, The Business Zoo, covers Culture and Leadership and how they are the flip side of each other and how either can make or destroy an organization. Good luck to GM CEO, Mary Barra. A lot of leaders try to change culture but often the culture wins!


The Wall Street Journal recently ran a story “Making Sure the Boss is the Right Fit”. The article cites some recent examples where seemingly exceptional leaders, from places such as Google, failed to mesh with the people or culture of their new firm.

We could go on with dozens of examples of this problem. The wizard from Apple who tried to transform J.C. Penney or the revolving door of leaders that Hewlett Packard had in the last decade.

One fascinating comment in the article was that it should take a lot more than interviews to avoid costly mistakes when hiring a new leader. And we will come to that. But one failure that both companies and potential executive candidates are guilty of, is not enough of or the right kind of interview. The higher the position is, in my mind, the more number and diverse the interviews should be.

My old private firm boss, Don Brown, had 7 interviews with a very qualified and ultimately successful candidate (that I had personally found!)  That seems like a lot and it is. But we had individual interviews, two on one interviews, two separate, private dinner interviews and even a dinner with spouse interview. Dinner interviews are especially critical and revealing. In an hour or so in the office, you can gloss over  a number of issues that can be much more fully explored or discussed in a two to three hour dinner. I am not saying that 7 is the right number, but too often in our fast paced world of business, we don’t spend enough time with interviews.

Which brings us to who should or could be included as part of the interview process. The direct boss, of course, and a couple other superiors who could be Board members. Also, a wide sample of the people who will report to the new hire. In the case of a potential CEO, the list should include the CFO, the heads of a couple businesses, the head lawyer and, my favorite, the head of HR. But smart firms also add to this list. Perhaps some very bright up-and-comer who is not shy. Maybe a soon to retire old, salty veteran who really knows the firm, its people and its culture. With a mix like this both the firm and the candidate could learn something about the possible fit.

But the hardest thing to analyze with any candidate is their fit or ability to adapt to the company’s culture. In my book, The Business Zoo, we talk extensively about this. Leadership and Culture, another famous business writer said, are the flip side of each other. A strong and dominate culture can destroy a new, very differently focused, leader. A weak or fading culture can be remade or revitalized by a new, strong leader. But most situations are somewhere in the middle. Candidates should study the hiring firm’s culture through the interview process and by doing their own research. With the internet this is certainly easier. Articles in business magazines or trade journals or a firm’s own written histories can tell you a ton. And the hiring firm needs to do research themselves, and not just with a search firm, on the candidate’s style and approach to people and problems as well.

Think of it like due diligence in a major purchase of a merger. The upfront, extra time and costs invested to improve the new leader’s chance of being successful is minor compared to the cost of a failed new leader and its impact on the company.

Leaders need to fit or adapt to a firm’s culture or they will fail; not the other way around!

Take more time and make more effort when hiring new leaders and when being hired.

The Noble Peace Prize made big news again recently. Not for who was granted the award. The people who inspect and deal with chemical weapons certainly deserve recognition. But this year the news was about who did not receive the Prize, a 16 year old young lady from Pakistan, who survived a murder attempt from the Taliban because of her outspoken views on women and education. We all know her as Malala.

She has appeared on worldwide television. In the U.S. she has been interviewed by Diane Sawyer, Jon Stewart and CNN. On Ms. Sawyer’s special, Malala came across as very mature for her age and extremely well spoken. Noble Prize or not she is a wonderful example for young people everywhere.

Which brings me to my point and why it was a mistake to not award her this Prize. The five Peace Prize committee members, who average 67 years old, looked at almost 300 different possible individuals or groups. The committee, which is organized in Norway, does not reveal its final selection process. It has been suggested that Malala was very young to win this prestigious award. This is because they Don’t Get It!

The goal of the Noble Peace Prize is to recognize those who promote peace and to spread that message. Like an Academy Award Oscar, many past recipients are old and did their work in the past. And that is ok. But here the Noble Committee had a chance to capture the imagination and excitement of the youth of the world and send them a message through this young lady. It is the young people today who can remake our world, not my boomer group. It is these same young people who are so involved in social media whether it’s Twitter or Facebook or whatever. This is how the world works nowadays. This is how you can sell a product or a service or even better here, the cause of Peace.

When my generation of baby boomers grew up the U.S. had just won another world war and we were shocked to see what happened with our involvement in Vietnam. Today’s young people have seen our country engage in a decade of wars in the middle East, often with no clear outcome.

So wouldn’t the thought of a very brave and special 16 year old young lady winning the Noble Peace Prize have had a lot more immediate and  longterm impact on the mission of Peace?

I have recently complained about Board of Directors especially in large, public companies.  But occasionally, I have run across some real, value adding, hard working Board members. Here is the story of one.

Cole National and its Misplaced Cash:

Cole National was founded after WWII by leasing spaces in Sears stores to make keys. It expanded over the years to leased optical departments and then to one of the first mall kiosks with their Things Remembered Shoppes, which sold items and performed services like engraving.

Cole was a client of my employer, Arthur Andersen, when they expanded rapidly and lost control of their business. One summer, AA&Co. sent several of us to help Cole out. This led to my first ever, face-to-face meeting with a Board member.

My assignment at Cole was to help with their massive cash management situation. For a month, all I dealt with were their many bank accounts scattered around the U.S. Perhaps we should call it their cash unmanaged system. Why? Due to their focus on rapid growth through acquisitions and new stores, they had lost control of their cash. At the same time due to heavy debt and a retail downturn, they were losing money and their stock price was falling. When this happens, even an often reluctant Board of Directors is forced to got involved.

Cole had not been able to track their cash flow or even reconcile their three hundred bank accounts for over six months. You may think this is a very rare event, but I can assure you that companies often lose control of aspects of their businesses.

So what did we find? Retail stores were being opened so fast that their sales and cash were piling up in some small, remote bank and never being transferred to headquarters. With some of the recent acquisitions, large cash escrow or down payments were placed in bank accounts that were never closed out. There were accounts with large untouched positive balances and some accounts with large overdraft balances and fees. This situation was a textbook on what not to do with cash.

But the worst was the Main Retail account that was supposed to receive all the transfers from the stores. It was not just a cash nightmare, it was an accounting one as well. Cole was trying to account for the sales of their lock and key business separately from their optical and other products by using the proceeds into the overused Main Retail Account.

In the end, we found, in today’s dollars, about $500,000 of cash the Company did not know about; a very big deal when they were having trouble with both earnings and their banks. All of this went into a dozen page report that listed account numbers, misplaced cash balances, and even proposed journal entries to correct things.  I also wrote new procedures for managing and reconciling both the stores and Main Retail account.

Which brings us to the Board of Directors. Our reports were submitted both to Cole’s Controller and their head of Internal Audit. Apparently, the Finance Committee of their Board also received a copy. On one of my last scheduled days at Cole, their Controller comes over and says that a member of their Board Finance Committee wants to meet with me about my report. At that point of my life, I assumed this was like meeting with another client executive, no big deal. I had not yet been trained on the almost mystical importance of such men. Only in my later years, did I learn the vast power of Board wizards and the need to constantly care for and feed them (both data and food).

A meeting is arranged with the Board member. I assumed the two of us would sit down across a desk and chat. But no, the meeting will be in the Board room. And besides the two of us, the Corporate Controller, the Manager of Corporate Accounting, the head of Internal Audit and I am not sure who else shows up. This is before Power Point, so the only media is my dozen page report which everyone seems to have a copy of. The Controller introduces me and asks me to summarize my report’s highlights. The dialogue goes like this:

Me: we found dozens of overdraft bank accounts.

Director: is this true?  The Cole people nod yes.

Me: we found dozens of accounts with untapped cash.

Director(louder): is this true? Cole people nod yes.

Me: in total we discovered over $500,000 in unknown cash.

Director(louder yet): is this true! Another yes nod.

Me: we reconciled 300 bank accounts for 6 months.

Director(pounding on table): I guess this is true! Yes nods.

Me: we wrote procedural recommendations on all this and how to reconcile the Main Retail bank account which will take someone 1 week a month to do.

Director, turning to me, shouting: 1 week that is crazy!

Me: it took me a week the first time, now I am down to three days. The person I just trained will need 1 week.

Director, yelling at Cole people: adopt these new procedures in a hurry and never let this happen again!!

Director, to Me, smiling: good job, thank you.

What did I take away from that first Board member encounter at Cole and what have I learned later after many encounters?

Then, Board members must often get really involved!

Later, not. If this was true, Boards and companies would be much better off. Directors rarely get this involved and, if they do, it’s because there is a terrible crisis.

Then, the Cole managers seemed afraid of the Director.

Later, sadly true. We are told that Management serves at the Board’s pleasure. But fear is not good in a Zoo or a Board room.

Then, Directors yell at Management but are nicer to, and even compliment, outside Advisors, like me.

Later, Directors are often too nice to and influenced too much by Advisors. Directors rarely yell at or confront company managers even when they should. This is especially true in a full Board meeting with dozens of people.

So what are the overall takeaways from this Business Zoo tale? For managers, when you meet Directors, know your material and act confident, not afraid. And for Directors, get more involved in the details, even if its only Cash; it will be noticed by management and can really help.

Disclosure: I own a very modest amount of the stock of Office Depot. I brought it because the people who work in the Chicago and Florida stores we frequent are so helpful and polite (and thus well managed). They even talked me into their frequent buyer program and each year I get about $20, which is enough for a modest bottle of wine.

Because of my vast ownership, I and thousands of others, received the Joint Proxy Statement to announce their merger and to get my vote. The second line on the cover announces that this is “A Merger Of Equals”.

So, I naturally found this lead-in fascinating enough to actually read much of the important parts of the 250plus page Proxy. In the finer print, you find some interesting details: 1. Office Depot shareholders will get 55% ownership to 45% for Office Max, very interesting.  2. Office Max legally will become a subsidiary of Office Depot, also interesting. 3. For tax purposes, they hope to qualify the merger as a tax-free reorganization which makes sense. 4. For accounting purposes, this will be an acquisition by Office Depot of Office Max, those pesky accountants just don’t like equals! 5. The new Board will have equal representatives from both and will elect a new Chairman,  senior team, and headquarter location. That meeting would be fun to listen in on.

I am very sorry to tell the fine employees of both firms, but there are “No Mergers of Equals!” The banking world loves this phrase and uses it constantly. It sounds friendly and cooperative and even nice. But if you look at the history of bank mergers, someone always brought someone, period. Modern day JP Morgan/Chase goes back to Chemical Bank buying half their New York competitors. Most of the deals were called mergers of equals. But the old Chemical Bankers always came out on top. And within three to five years, two thirds of the other bank’s senior people were gone, “to pursue other interests”. Yes, Jamie Dimon, a non Chemical banker,  is now Chairman, but that is another story.

The reason most mergers can not be mergers of equals is that people in the same industry, whether it’s banking or office supplies, hate their main competitors at worst, and distrust and dislike them at best. Even in the same industry, the culture and leadership style of each firm is always unique and never easy to blend. That is the nature of companies and the people who run them. It is a dog-eat-dog world out there and in my forthcoming book, The Business Zoo. Deal with it.

Who will come out as the real buyer and winner of this deal? I don’t know but I am rooting for my Office Depot team!

Note to self: send in that Proxy, my shares may turn the tide!