Posted by Dave Lorenzo - Business Coach

This is an opportunity for everyone to learn from a big mistake I made recently.

A few months ago a few residents in my condo building asked me to run for a seat on our association’s Board of Directors.  I was flattered by the requests and the problems in our building seemed relatively easy to address.  Also, since I was new to the building I thought becoming a board member would be a great way meet my fellow residents.

I have been on the Board of Directors a little more than one month and in that time:

• Our manager has resigned.
• Several issues involving the construction of the building have surfaced.
• The residents are calling and e-mailing me several times each week because we have increased maintenance fees to match the ever escalating insurance rates in Florida.
• I have one resident who literally calls me daily, late at night, about a patch of grass that is missing from our playground area.
• We have one board member who loves long board meetings, has no job and would love to meet every week.  In addition, this person serves to agitate the building residents, makes emotional decisions without analyzing the facts and is pushy beyond what is necessary. 

The most disturbing of all of these issues is the behavior of the overly zealous board member. 

Volunteering is great but we should all pick and choose our opportunities carefully.  This choice was clearly a poor one for me. 

When I ran for this position I expected that I would receive an occasional call from a resident. I also expected that there would be personality conflicts and emotional issues that may influence decisions.  I guess I never expected irrational behavior and unrealistic expectations.

I’m not a quitter so I’ll try to stick it out.  I may need to change my phone number, e-mail address and wear a disguise to get in and out of the building.

Filed under: Executive Suite
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Posted by Dave Lorenzo - Business Coach

During the past couple of weeks we have seen two cases of CEO’s taking responsibility for their companies errors:

Jet Blue CEO David Neeleman went on You Tube, the Today show and everywhere he possibly could to tell passengers that he was sorry for the mistakes his company made on Feb. 14.

Here’s a quote from Jim Davis, CEO of New Balance, in the Boston Globe (from Seth Godin):

Q. What was wrong with New Balance’s approach to apparel?

A It was my fault. We just didn’t do it right. We didn’t have the right people. We tried to be all things to all people and didn’t do anything right.

There are two guys standing up to take the blame when things went wrong. 

I would buy their stuff just because they showed some backbone. 

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Posted by Dave Lorenzo - Business Coach

As an Emerging Leader in an organization, one of the worst labels you can have hung on you is the title of being “The Next Big Thing”.  The minute you are anointed a “savior’ or “the Smartest Person” in the company you have immediately received a title with a promise you can never fulfill.

This type of thing happens regularly in many companies all over the world.  A new Junior Executive joins the firm.  He may be a few years out of an Ivy League graduate school.  He may have had industry experience.  He may have interviewed well.  The boss likes the new guy.  He mentions to a few people how impressed he is with Mr. Newguy’s pedigree. 

This is the kiss of death for Mr. Newguy.  Why?  Three reasons:

1. Mr.  Newguy will never be able to live up to his advanced billing.  He will always be “on the spot” when he is in front of a group of his peers.  He will always need to prove his intellect.  He will need to provide substance for the accolades.
2. Other executives will be envious of Mr. Newguy’s status in the company.  People always hate the teacher’s pet because they want to be the teacher’s pet.  Envy is even more powerful when you get up higher you on the company organizational chart.
3. Mr Newguy will receive every difficult assignment that comes along.  He will become overwhelmed by the work people will throw at him.  People will think to themselves; “If he’s so smart, let him prove it”.

The best thing a new executive can do when they enter a company is learn the lay of the land. This means that they should gain an understanding for the organizational politics before committing to any voluntary work.  It may take a couple of weeks but that will be time well spent.  Don’t make a big presentation to the CEO in your first few weeks on the job.  In the words of Stephen Covey, “seek first to understand (the company) then to be understood”.

The smartest person in the company, or the next big thing in a company, is usually the first one fired when things go South.  After all, if they really were that good they would have told us that results were tailing off.

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Posted by Dave Lorenzo - Business Coach

Maybe nobody cares about this but…

Isiah Thomas stinks as a coach and he stinks as a General Manager.   If your record stinks, you need to keep your mouth shut. Isiah’s record with the Knicks is horrible.

Read this and tell me that anybody with a horrible record would talk this way.

Sometimes things happen in sports that would never fly in the business world.

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Posted by Dave Lorenzo - Business Coach

David Maister gives us a peak behind the curtain on the consulting industry.  Here are his words of wisdom:

“As consultants, many of us give advice on things we were not trained in, and do not actually have ‘proof’ that what we advise is correct. We know less than people think we know. I used my (now) familiar metaphor that most business problems are like losing weight: things the client already knows that he or she should do, but just isn’t doing. As consultants, we don’t have any magic pills – we just help clients exercise more and eat less.”

Once again, David is right on the money. 

The most important service we (as consultants) can provide is helping the client draw the right conclusions.  We help clarify their thinking.   

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Posted by Dave Lorenzo - Business Coach

The Twelve Most Highly Paid CEOs in 2005:

1. Barry Diller from IAC/InterActive (2005 net profit margin: 3.62%): $295M
2. Richard D. Fairbank from Capital One Financial (2005 net profit margin: 18.02%): $249M
3. Eugene M. Isenberg from Nabors Industries (2005 net profit margin: 18.27%): $203M
4. Terry S. Semel from Yahoo! (2005 net profit margin: 33.77%): $183M
5. Bruce E. Karatz from KB Home (2005 net profit margin: 8.92%): $156M
6. Angelo R. Mozilo from Countrywide Financial (2005 net profit margin: 25.24%): $142M
7. Henry R. Silverman from Cendant (2005 net profit margin: 4.78%): $140M
8. Michael S. Jeffries from Abercrombie & Fitch (2005 net profit margin: 11.99%: $114M
9. Richard S. Fuld from Lehman Brothers Holdings (2005 net profit margin: 10.06%): $104M
10. William E. Greehey (former CEO) from Valero Energy (2005 net profit margin: 4.37%): $95M
11. Ray R. Irani from Occidental Petroleum (2005 net profit margin: 31.45%): $87M
12. Carol A. Bartz from Autodesk (2005 net profit margin: 21.59%): $83M

How many of these people actually deserve this kind of money?  You tell me.

Thanks to Flexo for the Info.

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Posted by Dave Lorenzo - Business Coach

The U.S. Department of Labor outlines three main points of employment as an executive:

• Keen competition is expected because the prestige and high pay attract a large number of qualified applicants.
• Top executives are among the highest paid workers; however, long hours, considerable travel, and intense pressure to succeed are common.
• The formal education and experience of top executives vary as widely as the nature of their responsibilities.

Competition. In any field, those who strive to succeed face competition, for the most part in direct proportion to the level of success they want to achieve. This is a fact of life, and you shouldn’t let it stop you from pursuing an executive career, if that is your goal. Learn from the competition, and form alliances with them if you can.

Benefits vs. Demands. Every lifestyle represents a spectrum of joy and pain. You will have to put more time and energy into a career as an executive, but if you love your work, that won’t diminish your happiness and satisfaction. A role of strong leadership offers many more advantages than just monetary. If you are cut out to be a leader, evolving into such a role will benefit and reward you in multiple areas of your life.

Education. In some countries, formal education and certificates are essential, and you needn’t even apply for a position without the proper training. This is not always true in the U.S. According to data provided in this Forbes feature on executive pay, 8 of the top 25 highest paid executives (32% of them) do not have graduate degrees, and 3 (12%) do not even have undergraduate degrees.

Barry Diller (#2 on the list) dropped out of UCLA after one semester, started his career in the mailroom of a talent agency, and went on to become CEO of Paramount Pictures, then Fox, Inc., and, today, CEO of IAC/InterActiveCorp.

Though Larry Ellison (#14) ended his formal education after two and a half years of study at the University of Illinois and the University of Chicago, he has been CEO of Oracle for almost 30 years now.

Lack of a degree has obviously not affected their levels of achievement or income, and such factors needn’t affect yours. Most employers in the U.S. only want to know that you can get the job done.

If you aspire to a professional leadership position, don’t let anything stop you from pursuing that goal. Leaders get to their positions of success by refusing to let anyone stop their persistent progress forward.

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Posted by Dave Lorenzo - Business Coach

I am a firm believer in the philosophy that you don’t get rich working for somebody else. That’s true unless you are the boss. Career Journal  provides us these staggering statistics:

• Chief executives of U.S. corporations earned 262 times the pay of the average worker in 2005, the second-highest level in the 40 years the data’s been kept.
• Last year, the average CEO was paid $10.9 million a year, or 262 times an average worker’s earnings of $41,861, according to the Economic Policy Institute.
• The research group also found a CEO earned more in one workday in 2005 than an average worker earned in 52 weeks.

I like to think of myself as the ultimate capitalist.  I believe that people have a right to earn whatever the market will pay them – based upon the value they create.

Here is my question, based on the data above:  Is the average CEO really creating 262 times more value than everyone else?

Check your investment portfolio and get back to me. 

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