CEO pay is a very complex issue that involves a lot of tradeoffs. Ford‘s Alan Mulally represents a particularly interesting situation – he is among the absolute best executives in the world right now. In the last few years his work at Ford has been truly remarkable by nearly any metric. Further, he took an incredibly difficult job (Ford was behind when he took over and was falling fast), and he was soon faced with the most turbulent competitive landscape the automotive industry has seen in the last 50 years. Both of his primary American competitors went bankrupt. Yet through this fire, he skillfully led Ford through tremendous changes and has the company incredibly well positioned to be exceptional for the next few years – even ranked as a more attractive stock than Apple by CNNMoney readers.

This is what makes the issue so difficult. Does this tremendously successful CEO deserve a big paycheck? Absolutely. Does he deserve a $55 million dollar paycheck? That is the real question. The head of the UAW, Bob King, made this distinction very clear, which highlights the moral center of this debate. He specifically said that he does not think “any human being in the world” deserves that much money. This raises questions that business schools, boards of directors, and society at large need to contend with – do we believe that epically-large pay packages are morally responsible? Everyone agrees that long-term oriented pay packages are ideal for CEOs, as they help to solve the agency problem inherent in large public organizations by effectively aligning the CEOs interests with the interests of shareholders. However, the academic literature has shown that long-term contingent pay can be effective even if it does not involve incredibly large absolute dollar amounts. With this in mind, Bob King may be right – enormous pay packages might not be morally right. But I can assure you that until CEO labor markets adjust to bring down these huge pay packages, the best people (Alan Mulally included) will be tempted to go to organizations where they can get the best rewards for their talent.

I think this is where Notre Dame has the opportunity, and maybe the responsibility, to be a voice at the center of the debate. Given our vision to help corporate America have the courage to Ask More of Business, we need to help influence leaders and especially boards of directors to make more responsible decisions that embrace long-term contingent pay without falling victim to the easy way out of rewarding great leaders with exorbitant packages just because they feel like everyone else is doing so. Further, market leaders like Ford could use this as a ‘teachable moment’ to show their peers that truly amazing talent can be fairly compensated with large but not excessive pay packages even in the face of epic leadership we might be able to get closer to making this a reality.

For more, also see the press release Notre Dame put together about my comments:  ND Expert.  I also had the opportunity to speak with Jack Nerad on his nationally syndicated radio show about these issues more broadly. The interview should be airing in the next few weeks:  America on the Road.

I’m always interested in the guy-behind-the-guy.  Despite our tendency to lionize the individuals who do great things in this world, often those who reach great heights are propelled in part by some interesting people who stay behind the curtains.  Sometimes these people are spouses with great support, ideas, or encouragement. Sometimes they are mentors who have seen their day come and go and later find their greatest fulfillment in pressing a new hero into service or greater heights. Sometimes the ‘man behind the curtain’ is a benefactor.

Dr. Paul Farmer is a truly great man.  Even among those who have a life’s ambition to help the poor or serve the vulnerable, Dr. Farmer sets a high bar. His work, now known as Partners in Health, embodies the essence of transformational service and is rooted in a service to some of the poorest and most vulnerable people on Earth, in rural Haiti.  Much has been written about the greatness of Paul Farmer, most notably in the incredibly well reviewed book “Mountains beyond Mountains” by Tracy Kidder. This work and others attest to the great story of how a kid from Florida who was about to start at Harvard Medical School begged, borrowed, and stole whatever he could to help a people who the rest of the world seemed to have forgotten about. He built clinics, brought resources, directed the attention of institutions (the World Health Organization and Harvard Medical School among others), and changed the way modern medicine was delivered to those he served. By learning about the people he served and the lives they lived, not just their medical problems, Dr. Farmer achieved incredible results and changed medicine.

However, to me a layer beyond the Paul Farmer story is the story of a friendship and a man behind the curtain who in no small part made it all possible. Tom White was an exceptional man in just how unexceptionally he saw the world. Yet it was his humble vision and vigorous benefaction that made the Paul Farmer story possible. He seemed to have a simple way of approaching life, focused on core values of integrity and honest work, but embodied in exceptional generosity of heart and money. He was a successful businessman in his family’s construction business (J.F. White), but saw his role in this world as much more than just to be in business. In a moving eulogy reflecting on the life of his friend and chief benefactor, Paul Farmer noted that Tom saw a world in need and responded with generosity, compassion, and service. He did not accept simple answers to tough problems, and saw the needs of the poor as urgent rather than just a long-term problem. He focused on building an ‘inclusive world’ recognizing that the basic humanity of all people is the same. He rejected the idea that the poor had made bad choices, arguing that a great deal of each person’s life is determined by the circumstances into which they are born. This, in part, motivated a profound urgency to act to bring the hope of prosperity and health to those who deserved it but had little access to it. The depth of Tom’s compassion drove him to give away nearly all of his wealth toward these goals, with the Boston Globe joking that Tom White’s bumper sticker should read: “He who gives it all away wins.”

By most accounts, Tom White seemed to shy away from individual acclaim, despite his immense generosity. He preferred to be the embodied example of the man from the Wizard of Oz, who despite controlling all of the sparkle and power of the emerald city, declared, “please pay no attention to that man behind the curtain.” 

I wonder who else is back there, behind all those curtains.

A few days ago Steve Jobs announced that he was taking another leave of absence from Apple to focus on his health.  See a story on his announcement here. Of course, we all wish him the best and a safe recovery. However, this situation raises some interesting leadership questions and highlights some of the dangers of executive hubris.

The Danger for Apple

In fact, I would argue that Steve Jobs is putting Apple in a very dangerous position. Uncertainty around executive leadership is always difficult for large public firms, but is particularly precarious for an innovation-driven company in a highly chaotic consumer market. Apple faces highly tumultuous markets with nearly all of its products. Research has shown that temporary changes in leadership lead to inhibited steward-type behaviors in which the interim leader is less likely to enact significant changes as they lack the credibility and power to carry out any real change. Given the importance of fast action in the markets where Apple competes, this could be a real threat to the company. Depending on the length of the absence, constrained leadership could lead to innovation stagnation, which could also seriously hurt the Apple brand.

A Solution

The most important issue for Apple at this point is to create a long-term plan for succession to ease market anxiety over the loss of the brand’s most important face. Given Steve Jobs’ centrality to the Apple brand and culture, it is likely that he will continue to hold significant sway over the organization for the long term regardless of his official title at the firm.  Since the confusion associated with his frequent coming and going over the last few years has been so disruptive, it might be in Apple’s best interest to shift him out of day-to-day leadership role into a more stable advisory role, such as continuing his board chairmanship but moving him out of the CEO role.

Root Cause Analysis:  Executive Hubris

It would be easy for Apple to let Steve Jobs push them around on these issues, since he is so important to the firm, is a founder, and is the public face of the company. In fact, top executives are often subject to narcissism biases and hubris that can lead them to become so focused on their own legacy that they inadvertently choose paths that are in their own best interest rather than the organization’s best interest. It is not clear that such leaders always recognize that this is happening, making the problem even more difficult to solve.

What Steve Jobs Could Learn From Bill Gates

There is precedent for founders moving out of CEO roles but continuing to hold significant sway in the firms they created. Bill Gates is one example, as he has continued to stay involved in the big decisions at Microsoft as board chairman, while giving up his full-time job as CEO of the company he founded to pursue other interests. In this case, Steve Jobs could potentially save the company a lot of ongoing uncertainty by transitioning out of his official role as CEO to deal with other important issues in his life.

Although the issues are challenging, it may be time for Apple to stand up to Steve Jobs. Whether or not they will is another story.

For more, also see the press release Notre Dame put together about my comments:  ND Expert.

For most of recorded history, God was the only one who created life.US-SCIENCE-GENETICS-VENTER

Although I’m largely a huge fan of Craig Venter‘s work and approach to science (he is the guy who won the race to code the human genome), his new project creeps me out.  He and his colleagues are setting out to conquor the next great genetics challenge, synthesizing life from scratch. The technology is largely in place, and they have now succeeded in their primary efforts.  The team chose an ‘easy’ target for their first attempts, trying to create a simple bacteria called mycoplasma genitalium. It worked. Technically, it is not alive, as it lacks the biological machinery of a cell.  However, the genome is basically all there.

The good news is that by doing this, they will be able to probe a ton of very fundamental questions about the functioning of different parts of the genome directly. This type of work will help to really move our understanding of genetics into the 21st century.  The implications of the work are huge for pharma, biotech, and others who can use this info to build better drugs, and solve medical mysteries. Still, they are basically creating frankenstein. The logical extension of this work is to move to more complex organisms.  Where will that lead?  Design-your-own pet / friend / child / husband laboratories?  Hmmm.  Science is moving ahead at full steam.  I’m not sure the world is ready.

Creepy fact # 1: To make sure that their frankenstein did not escape captivity from their lab, Venter and company made it dependent on an antibiotic so that if it escaped it could not survive. The fact that they were worried about this worries me.  What would happen if it was let loose to run around with God’s other creatures?

Creepy fact # 2: To make sure that frankenstein was clearly identifiable to anyone through a genetic test, the scientists wrote the name of their institute and their individual names into its DNA code. Creepy!

As it is presentation season at Notre Dame, I’ve had a few recent requests from students for my “tips on making your presentation awesome” guide.  So, I thought I’d post this here and share it with everyone.  None of this is rocket science, but I’ve found that just thinking through some or all of these points in the build up of preparing for a presentation can be a helpful refresher and get a group talking about things that they can do to be more persuasive in their presentation.  The key, for me, is to think of a presentation as a conversation in which you are trying to persuade someone to believe in your ideas.  The list below is an aggregation of ideas I’ve shared with groups through the years after watching and grading hundreds of group presentations on a wide variety of different topics in business classes at Notre Dame and Michigan State over the last 7 years.  I hope this helps!

The List

  1. Use embedded pictures and stories to stoke interest in your ideas, making your ideas come to life with tangible or funny examples that illustrate your points.
  2. Pay attention to eye contact (this doesn’t mean perfect eye contact, just a consistent engagement with the audience, very limited reading from notes / slides).
  3. Pay attention to transitions between speakers (smooth, graceful handoffs between collaborators working together who know each other and are working toward a common goal, not abrupt starts and stops of modularity). 
  4. Pay attention to cadence (both within and between speakers!).
  5. Pay attention to volume (we need to be able to hear you, but don’t yell at us).
  6. Pay attention to your introduction (short, sweet, professional).
  7. Pay attention to your conclusion (sum up your best stuff simply and persuasively).
  8. Pay attention to perceptions of modularity (although the work may have been done in parts, make the presentation seamless, appearing to be one coherent whole of collaborative creativity)
  9. Think about your presentation as a multi-media experience (it is always nice to engage the audience through multiple media devices, such as lecture, slides, handouts, video, audio, etc. This doesn’t mean that you should try to do everything, just a keep these things in mind to make your presentation as engaging as is appropriate).
  10. Pay attention to PowerPoint design (simple, elegant designs that have colors that make it easy to read text, a limit to the amount of text per slide, interesting use of graphics and pics)
  11. Pay attention to professional appearance as part of the charm and polish of your presentation.
  12. Try to be engaging, as audience engagement always matters.
  13. Avoid fidgeting too much, but moving around a bit can be good.
  14. Avoid talking to other group members behind the speaker as much as possible.
  15. Smile.  Be funny if you can, but don’t be obscene.  Be persuasive!

 Final thoughts: 

  •  In the reality of the professional world, the simple truth is that presentation effectiveness is always a function of both style and substance.  I want you to be great professionals, so I’ll be grading you on both.
  •  Teams are often great at critiquing each other’s written work but don’t even think about each other’s presentation prowess.  Break the ice.  Take this list and talk it over as a group.

Click here to read some Sternberg files

“The universe is full of magical things, patiently waiting for our wits to grow sharper.” – Eden Philpotts

The following list comes from Robert Sternberg, a Yale PhD and professor, who is one of the world’s leading authorities on human intelligence.  The actual list comes from the website of Michael Anissimov a science/technology writer and blogger  who blogs on issues of transhumanism, AI, and other topics.  It is a fantastic collection of ideas from Sternberg on the paths to failure taken by otherwise very intelligent people.  Some of this comes off as ‘obvious’ but collectively the list is very insightful.  Enjoy.

Content from Sternberg, R. (1994). In search of the human mind. New York: Harcourt Brace.  Click here to buy the book through Amazon.

Why Intelligent People Fail

1. Lack of motivation. A talent is irrelevant if a person is not motivated to use it. Motivation may be external (for example, social approval) or internal (satisfaction from a job well-done, for instance). External sources tend to be transient, while internal sources tend to produce more consistent performance.

2. Lack of impulse control. Habitual impulsiveness gets in the way of optimal performance. Some people do not bring their full intellectual resources to bear on a problem but go with the first solution that pops into their heads.

3. Lack of perseverance and perseveration. Some people give up too easily, while others are unable to stop even when the quest will clearly be fruitless.

4. Using the wrong abilities. People may not be using the right abilities for the tasks in which they are engaged.

5. Inability to translate thought into action. Some people seem buried in thought. They have good ideas but rarely seem able to do anything about them.

6. Lack of product orientation. Some people seem more concerned about the process than the result of activity.

7. Inability to complete tasks. For some people nothing ever draws to a close. Perhaps it’s fear of what they would do next or fear of becoming hopelessly enmeshed in detail.

8. Failure to initiate. Still others are unwilling or unable to initiate a project. It may be indecision or fear of commitment.

9. Fear of failure. People may not reach peak performance because they avoid the really important challenges in life.

10. Procrastination. Some people are unable to act without pressure. They may also look for little things to do in order to put off the big ones.

11. Misattribution of blame. Some people always blame themselves for even the slightest mishap. Some always blame others.

12. Excessive self-pity. Some people spend more time feeling sorry for themselves than expending the effort necessary to overcome the problem.

13. Excessive dependency. Some people expect others to do for them what they ought to be doing themselves.

14. Wallowing in personal difficulties. Some people let their personal difficulties interfere grossly with their work. During the course of life, one can expect some real joys and some real sorrows. Maintaining a proper perspective is often difficult.

15. Distractibility and lack of concentration. Even some very intelligent people have very short attention spans.

16. Spreading oneself too think or too thick. Undertaking too many activities may result in none being completed on time. Undertaking too few can also result in missed opportunities and reduced levels of accomplishment.

17. Inability to delay gratification. Some people reward themselves and are rewarded by others for finishing small tasks, while avoiding bigger tasks that would earn them larger rewards.

18. Inability to see the forest for the trees. Some people become obsessed with details and are either unwilling or unable to see or deal with the larger picture in the projects they undertake.

19. Lack of balance between critical, analytical thinking and creative, synthetic thinking. It is important for people to learn what kind of thinking is expected of them in each situation.

20. Too little or too much self-confidence. Lack of self-confidence can gnaw away at a person’s ability to get things done and become a self-fulfilling prophecy. Conversely, individuals with too much self-confidence may not know when to admit they are wrong or in need of self-improvement.

There are a lot of stereotypes about smart people.  Most of these stereotypes are well supported with the geeks and freaks that occupy the top of the intellectual spectrum.  However, a few of the absolute intellectual elite break the mold.  Nathan Myhrvold is one of these.  He is as one-of-a-kind as people come, and he is amazing.

Let’s start with some of his geek cred.  It’s pretty good.  He started college at age 14 (ala Doogie Howser).  He graduated from UCLA having studied math and physics with bachelors and masters degrees.  Then on to Princeton, where he recieved his PhD in theoretical and mathematical physics by age 23 (now I’m thinking of the “Charlie” character from the TV show Numbers).  What does a wunderkind do with a Princeton PhD by 23?  He went to study cosmology and quantum field theory with Stephen Hawking at Cambridge.  Like most super-geniuses this was just the beginning.  He left Hawking to start a computer start-up in California, which was soon snapped up by Microsoft.  He then worked at Microsoft for 13 years, launching many of their best selling products, the Microsoft research division, and running a bunch of the company as the Chief Technology Officer (also getting filthy rich).  After leaving Microsoft he has broadened into a variety of scientific and technical ventures, and is currently wrapped up in running an ‘invention company’ called Intellectual Ventures that is shaking some of the foundations of invention with its approach to brainstorming the future of everything from semiconductors to lasers that shoot mosquitos out of the air and biotechnology (there will be a future post on their methods). He holds many patents and has published widely in the top echelons of science.

That is the geek cred, which is pretty A+ stuff.  Along the way, however, he has demonstrated an amazingly diverse and rounded taste for life.  He is a master French chef (once an assistant chef in a top Seattle French restaurant).  He is a paleontologist.  Not just a museum-dwelling paleontologist, but a get-your-hands-in-the-dirt digging up dinosaur bones in Montana every year paleotologist.  He has a complete t-rex skeleton in his living room.  He is a world champion barbecue master (winning 1st and 2nd in Memphis, TN world championships).  He is an award winning nature and wildlife  photographer.  He is an avid searcher for alien life with SETI.  He is a dad, husband, and family man.

Malcolm Gladwell once famously described him as “gregarious, enthusiastic, and nerdy on an epic scale.”  I agree.

A few years ago, when my daughter was getting ready for her heart surgery her Yale-educated doctor and I were talking about everything from obscure rock bands to the latest in medical innovations with sonic technology.  When I commented on his broad knowledge base, he laughed and said that you never want a doctor whose brain power is fully maxed out with the medical knowledge, instead opting for the doc with enough bandwidth for other pursuits as well.  Nathan Myhrvold is an example of breadth on steroids.

What is he doing now?  In addition to shooting mosquitos out of the sky to help with the malaria crisis and solving global warming (by building a shield of sulfer in the atmosphere), he has another project he is hot and passionate about.  What, you might ask?   Working on a cookbook, of course.