Tomorrow marks the Minneapolis launch of my new book, True North Groups: A Powerful Path to Personal and Leadership Development, written with co-author Doug Baker. We have had 1,500 students at Harvard Business School participate in these groups, which we refer to there at Leadership Development Groups. The comments on True North Groups in the following video come from participants in last February’s first executive education course in Authentic Leadership Development. They give a good cross-section of opinions about the value of small groups for leaders.
Leadership Kudos for this week go to New York City Mayor Michael Bloomberg for his effective leadership during this weekend’s crisis with Hurricane Irene. Bloomberg was front-and-center and on the air waves urging New Yorkers to take the pending storm seriously and get out of town. Behind the scenes he coordinated effectively with FEMA, New York State and local officials as well as President Obama to minimize loss of human life and damage from the storm.
Leadership Gaffes go to President Obama’s National Labor Relations Board (NLRB) for continuing to block the start-up of Boeing’s $1 billion plant in Charleston, SC that will produce the 787 Dreamliner, America’s most promising export for the next 25 years. Boeing is proposing to hire 6,000 employees in SC – IF the NLRB will let them. There’s no law against plants in right-to-work states, as both German auto makers BMW and Mercedes have shown with their highly successful SC plants. Meanwhile, Boeing is adding 2,000 unionized jobs in Seattle. With 25 million Americans unable to find full-time jobs, why doesn’t the Obama administration step in and get this resolved?
If you’ve ever had an interest in hiking in Switzerland here’s the perfect Swiss hiking trip to consider. Penny and I just got back after a super week of hiking in the Bernese Oberland with good friends, all done without guides or travel organizers on a reasonable budget.
Arrived in Zurich via Amsterdam, and easily caught the first train to Lucerne after clearing customs. Stayed at a modest, but modern new hotel one block from the train station – the Ameron Flora. Took a walk around the city to walk off our jet lag. Then met our friends for dinner: we walked through Lucerne’s famous Chapel Bridge, along the canal to a fantastic place for dinner: the Terrasse at Hotel des Balances. We had a Michelin 1-star dinner at a beautiful table just above the canal with great views of the Lake of Lucerne and the city, as we listened to the cheers of the locals as Young Boys of Lucerne bested rival Basel, 3-1, in soccer and heard the singing on the canal.
Up early for breakfast so we could catch the 8:55 am train to Wengen, using our Swiss Pass for half-fare. Along the route, we changed trains in Bern, Interlaken, and Lauterbrunen, with the final leg on the Wengerbahn cog railway that eventually goes through the mountains to the top of the Jungfrau. We all marveled at the perfect timing of the Swiss rail system which enabled us to easily change trains with only 4-5 minutes. After a total of three hours, we are arrived at our destination: the beautiful mountain village of Wengen, nestled just below the Jungfrau.
Upon arrival, we walked five minutes to the Alpenrose, where we had nice south-facing rooms with gorgeous views of the Jungfrau. After unpacking, we regrouped and went to lunch in the village. Following lunch, we took the cable car up the mountain to Mannlichen. As we stepped off the cable car, we had one of the great views of the Swiss Alps with the famous north face of the Eiger immediately in front of us and the Monch and the Jungfrau jutting boldly out of the plateau to its right.
A pleasant 1 1/2-hour hike down a gradual slope brought us to Kleine Scheidegg, just below the Jungfrau. After another thirty minutes we arrived at Wengernalp, where we caught the cog railway back to Wengen. The views were spectacular throughout, as was the weather. Our hotel served us a pleasant five-course dinner that evening in its dining room.
(Hike: 2 hours, 4 miles, -1,200 vertical feet)
Up early for a full breakfast and then caught the 8:28 train back down the mountain through Lauterbrunen to Wilderswil, where we connected with an amazing cog railway of the old Swiss style – first installed in 1927 – up the mountain to Schnigye Platte. The train climbed 2,000 vertical feet in 57 minutes. But now our real hike was beginning: six hours and 2,200 vertical feet up the mountain to Faulhorn where Switzerland’s oldest mountain inn was built in 1830. We had beautiful vistas along the way, with Interlaken’s twin lakes, Thunersee and Brienzersee, far below us. After four hours and a challenging climb the last hour, we arrived at Manndlenen Hutte for a bowl of soup and sausage. Manndlenen was built in 1998 to replace Willy Weber Hut that we visited on our 1994 trip, where Willy served us hot chocolate and played the accordion for us. Willy is now in a retirement home, with the new owner having built a larger hut that sleeps 38 in its dormitory space.
After lunch we faced the most challenging climb of our trip: 1,200 vertical feet and two hours to Faulhorn. As we came out from lunch, Faulhorn towered high above us, causing some in our group to doubt their ability to make it to the top. But make it we did, in less time with less stress than we had anticipated. Arriving at this fabled inn at 2681 meters (8,800 feet) was an exhilarating feeling, as we settled in for a cold beer before heading off to our affordable rooms (with no heat, but heavy blankets). Penny and I made the short climb to the very top where we had a remarkable 360 degree view of the Swiss Alps, with the full range towering above us to the south. An early dinner in the rollicking, packed dining area – which included a group of thirty Swiss teenagers who had made the last climb with us – put us in bed by 9:30 pm.
(Hike: 5.5 hours, 6 miles, +2,400 vertical feet)
It was cold the next morning as a hard rain during the night cleared the atmosphere for another warm, sunny day with temperatures in the mid-80s by midday. We hiked nearly three hours down the mountain to First, the mid-mountain stop above Grindlewald, where we had snacks and drinks. Our next two hours comprised a beautiful cross-mountain hike down to Grosse Scheidegg, where we enjoyed a relaxing lunch on the terrace. One of the guys and I hiked the last two hours down the Via Alpina, through beautiful wooded mountain paths at the base of alpine mountain rising high above us, with waterfalls from the glaciers plunging down on the rocks and river below. The rest of our group elected to take the bus to Rosenlaui, where our 1779 restored hotel awaited our arrival. We were quite fortunate that evening as the hotel had its annual singing entertainment with an amazing group of 18 yodelers, whose could hit the highest possible notes. As the only foreigners in the hotel that evening, we were in for a real Swiss cultural treat as the yodelers sang before dinner and after each of the four courses.
(Hike: 7.5 hours, 8 miles, -6,000 feet)
We awoke to another beautiful morning following a second night of rain, had a typical Swiss breakfast, and made our sandwiches for lunch from the meat and cheese in the breakfast spread. We caught the 9:09 am bus to the town of Meiringen where we had spent the night back in 1994. From Meiringen we caught a series of three lifts – a cable car and two gondolas – to reach the Alpen Tower, on Planplatten high above Meiringen. From there we had our most delightful hike along the ridge line from Planplatten all the way to Tannenalp, with magnificent views of the Swiss Alps to the south and lakes and villages to the north, including Milchsee-Fruit that Penny visited on her first trip to Europe in 1965. We hit a few challenging “knife edges,” but nothing that couldn’t be easily handled. After three hours of hiking, we stopped for a sandwich lunch from our packs, high above the Tannensee with views of Milchsee to the west and Engstlesee to the east, nestling below a Swiss cross at the highest point of the ridge line. From there we ambled another two hours down to the lake of Tannen and through the town of Tannenalp From there we had an easy 45-minute walk through a pass to Engstlenalp Inn, site of our last mountain hotel – and our first back in 1994 when we made the reverse journey from east to west along the same route. Engstlenalp Inn had been upgraded since our last journey so we found ourselves in delightful modern rooms in the new wing. For “old times’ sake” we sat at precisely the same dinner table that evening in the inn’s dining room. It rained hard again that evening and weather the following day was predicted to be rainy, but the sky overnight and the sun shone brightly as we awoke.
(Hike: 6 hours, 6 miles, -1,800 feet, up & down)
After a pleasant Swiss breakfast at the inn, we headed out early at 8:00 so we could get back to Lucerne by mid-afternoon. We had a relaxing and beautiful hike above the
shores of Engstlesee before climbing up the mountain to the famous Jochpass. One of our group members had developed a severe blister so she and her husband elected to take the chair lift the top. An hour later we converged at the top of Jochpass in the shadow of Titlis Mountain and then we rode together down to Trubsee. Once again our group split up as two walked around the lake to take the cable car all the way to Engleberg. The remaining four of us hiked around the west side of Trubsee and down to an idle lift, where called by phone down to the operator who agreed to run the small gondola in seven minutes. Rather than walking the last hour down to Engleberg, we decided on a new adventure: riding the Trotti down. The Trotti is a uniquely Swiss invention of a scooter with bicycle brakes that you ride with both feet on the base down the mountain road through the woods to the base of the cable car station. Characteristically Swiss, we paid our fee but showed neither identification nor signed liability releases. We simply left our Trottis in the racks and walked into Engleberg for lunch. We concluded the mountain part of our trip with an easy, one-hour ride on the train to Lucerne, rolling down the mountain to Stansstad and around the lake to the large Lucerne train station. Collecting our luggage that we left at the Ameron Flora five days before, we checked into the Waldstatterhof Hotel across from the train station. We arrived by 2:30pm so we had time for a relaxing walks around Lucerne before meeting for the final night of our hiking trip.
(Hike: 4 hours, 6 miles, +1,200, -4,000 feet)
After roughing it for five days, we went to the Lucerne International Festival of Music in the KKL Concert Hall, designed by French architect Jean Nouvel for which he garnered the European Architectural Prize of the Decade in the 1990s. We heard a stirring all-Brahms concert conducted by world renowned conductor Bernard Haitink (music director of Amsterdam Concertobouw for twenty-five years). After the concert, we caught the Palace Hotel shuttle boat to Restaurant Jasper in the Palace for our final celebration at the end of “the Perfect Swiss Hiking Trip.”
(Total Hike: 25 hours, 30 miles, 17,000 total vertical feet, up & down)
After departing from our friends, Penny and I spent the next day visiting the Swiss Museum of Transportation in the morning, and then drove around the Lake of Lucerne in our newly rented convertible to Vitznau and Weggis, where we had a relaxing lunch on the lake overlooking the mountains rising above the lake. After lunch, we took the cable car to Rigi, where we hiked around the rim, before a brief visit to the town of Zug. That evening we had dinner with good friends on the Lake of Zug and spent the night in their home. The weather turned cold and rainy that evening, lasting through noon of the next day.
After breakfast with our hosts, we drove to Mont Pelerin, high above Vevey and Lac Leman, for lunch at the Mirador Hotel with friends from Colorado. Our destination that afternoon was Nyon, the ancient Roman village near Geneva, where we walked with good friends from our days in Switzerland and had a relaxing dinner of perch from the lake in front of us.
We backtracked east along the lake, revisiting our haunts from our year in Switzerland, passing Medtronic’s European headquarters at Tolochenaz, and had breakfast with friends from Medtronic days. Heading back toward Geneva, we caught our flights to Minneapolis via Amsterdam, arriving home by 7:00pm, with great memories of our trip.
Leadership Kudos and Gaffes: Google's Page focused on tomorrow's market and HP's Apotheker scrambling
Kudos to Google CEO Larry Page for his bold move to acquire Motorola Mobility to integrate Android mobile operating system. Page took over day-to-day operations at Google in April, and since then he's made strategic moves that streamlined and focused Google's growth strategy. Page is the right leader for Google at this time. While Schmidt was instrumental in allowing Google to become who they are today, Page's focus on mobile and social is positioning the company as a leader for tomorrow's market.
Gaffes to Leo Apotheker and HP for confused strategy to dump PCs, Palm, Smartphones and overpay for Autonomy. Does HP know what business it is in? Apotheker and HP are scrambling, and this type of frenetic M&A activity is in marked contrast to rival IBM's approach to disciplined value creation -- largely through organic growth. Gerstner and Palmisano, both storied leaders, took the long-term view. Apotheker is not. Only 18 months ago HP bought Palm, now they want to dump it along with their core business just as the mobile computing market is growing.
Leadership Kudos and Gaffes: Schultz leading globally and domestically, Boehner's leadership relying on chaos
Leadership Kudos this week go to Howard Schultz, founder and CEO of Starbucks,for his courageous restoration of Starbucks to a pioneering coffee house, nowexpanding around the world under Schultz's leadership. When Schultz returned as CEOin early 2008, most observers were predicting that the Starbucks mystique was waning and its growth was doomed. Schultz jumped in and addressed the problems head on, even closing all stores for a day to get his employees retrained on customer focus. Since then, Starbucks' revenues have grown in double digits, earnings have tripled, andfrom its low point in the fall of 2008, Starbucks stock has quintupled. Who says founders can't successfully go back home?
Leadership Gaffes go to House Speaker John Boehner for explaining Republicans hard line on the debt ceiling on talk radio, "A lot of them believe enough chaos would make opponents yield." He and his fellow Republicans were certainly successful in causing chaos and contributing to the historic downgrade of the U.S. credit rating from AAA to AA+. But the deeper issue here is that Boehner sees everything as a win-lose contest between parties and isn't focused on the country's pressing problems: jobs, growth, and deficit reduction. With 25 million Americans unable to find full-time jobs, don't we have enough chaos?
CEOs of multinational corporations are in a stronger position than three years ago. Balance sheets are strong, and productivity has increased. This crisis presents an opportunity to go on the offensive for CEOs who are in a position of strength. Here's the playbook I'd run:
- Reassure everyone that your company is in great shape. CEOs needs to maximize their visibility to ensure employees, supplier, customers, and community that their strategy is intact. Write an email, go on TV, post a series of Tweets, and show up to let the troops know that the company's strategy makes sense -- particularly in this tumultuous economy.
- Buy your stock back. Your stock is likely cheaper than it has been all year. Buying back your stock puts excess cash on the balance sheet to work, it shows the market how you really feel about your growth prospects, and it oftentimes provides a floor for your stock.
- Expand in emerging markets. There is growth abroad -- and not just in China. The current financial panic will likely accelerate the rise of new markets. Every CEO should be doing a quarterly global review of marketshare and growth. Now is the time to double down on bets that are playing out well in Asia, Latin America, and the Middle East.
- Initiate cost savings and productivity improvements. The best CEOs are always looking for efficiency increases alongside revenue growth. Even if that means trimming up employment in the US, companies must be lean and agile to sail through roiling seas. Growth isn't coming to the USA anytime soon, so CEOs must have an appropriate cost structure.
- Do cash acquisitions. This is an opportunity to put cash to work. As competitors' stock prices decline, look for opportunities to acquires businesses or assets in cash. Inflation seems almost certain in mid-term. Your cash may be the most valuable in this window that it's ever been.
This is a great time to get out from behind the desk, get into the market -- both telling your story and seeking new opportunities. Great leaders and great companies find opportunity in times of crisis.
Leadership Kudos this week go to John Chambers, head of Standard and Poor’s (S&P) for having the courage to stand up to pressure from Treasury Secretary Geithner and federal politicians and downgrade U.S. debt from AAA to AA+. Even after adjusting for a calculating error, S&P concluded that the U.S. debt situation warranted the downgrade because the country was not facing fiscal reality. “The gulf between the political parties,” S&P said, “had reduced confidence in the government’s ability to manage its finances.” China, the nation’s largest creditor with $3 trillion in foreign exchange reserves, said ominously, The U.S. needed to “cure its addiction to debts” and “live within its means,” raising the specter of creating a global reserve currency to replace the U.S. dollar.
Leadership Gaffes go to all the administration officials and political leaders, Democrats and Republicans alike, who ignored S&P’s warnings in early July, and continued to put their political ideology and angling for political advantage over the needs of their country. Their wishful thinking brings to mind the infamous words of Vice President Dick Cheney, who said, “We have proved deficits don’t matter.” All of them failed to heed the first rule of crisis management, “Face reality, starting with yourself.” Deficits do matter, and unless U.S. leaders bring finances in line, the country will be faced with a decade of Japanese-style malaise.
This week’s agreement to increase the U.S. debt ceiling is no cause for celebration.
Regardless of what the spin doctors tell us, there are no winners here. The political landscape is covered with the blood of all the politicians who were losers in this “no win” battle. Among the losers are:
- The President, who lost the leadership on U.S. deficits last December when he ignored the thoughtful recommendations of the bipartisan Bowles-Simpson Commission, leaving deficit reduction up to the politicians in Congress.
- The Republican Party, which let itself be dominated by Tea Party extremists, ignoring the wishes of the majority of Americans, walking away from a sound agreement and demonstrating its willingness to let the country sink for political gain.
- The Democratic Party, which has rigidified into the party of more spending and higher taxes while ignoring the country’s mounting deficits. It even undermined its President as he attempted to negotiate an agreement with House Speaker John Boehner.
- The United States, which has lost credibility in the eyes of the world as a constructive democracy and sound fiscal system which other countries can look to for leadership of the global economy.
The last minute agreement to avoid an historic default did not solve anything. It merely postponed the disagreements and set up yet another committee to resolve these complex issues.
“Gridlock” has become the new order of U.S. politics. Politics as the art of compromise has been abandoned by the current group of politicians who are willing to jettison the country’s best interests in order to gain short-term political advantage.
This is the third time since the November elections that the country has been traumatized by political deadlock:
- In a single weekend last December, shortly after the Bowles-Simpson Commission proposed a bi-partisan $4 trillion deficit reduction plan, the President and Congressional leadership went in the opposite direction. They lowered taxes and increased government spending by a combined $4 trillion, intensifying the problems that lay ahead.
- In April, unable to agree on a budget for this fiscal year, the politicians once again took the country to the brink of shutting down the government. The midnight agreement involved more compromises that kept the country running on an empty tank.
- For the past month the country has been paralyzed by the artificially-created debt ceiling duel. While mounting deficits are a growing concern, the politicians on both sides of the aisle were far less concerned about reducing them than they were in gaining political advantage through an historic game of “chicken.”
The biggest loser in all this is the United States and its citizens. Why? Because we are losing confidence in our elected leaders to put the interests of the country ahead of their political ideology and to reach sound agreements that enable the country to grow and produce jobs while putting the country on a sound fiscal footing.
Meanwhile, this debt ceiling tug of war distracted our leaders from the real issue: the sagging U.S. economy and jobs crisis. The U.S. continues to slip into a “no growth, no jobs” malaise, as recent GDP growth figures prove and twenty-six million Americans (16.2% of the work force) are unable to find full-time jobs. Until people get back to work and the economy starts growing, we will just continue to fight over a shrinking pie, as deficits continue to mount. The only solution to this dilemma is to get the private sector growing once again in the U.S.
However, the CEOs of companies, both large and small, that I have talked to in recent weeks are completely fed up by the political struggles in Washington. They are turned off and tuned out. They want to have no part of the debate, unless they feel that they have to weigh in to protect their best interests.
These CEOs are pragmatists, not political idealists. In the absence of domestic growth opportunities, they are looking overseas where great growth potential exists. Meanwhile, they are shedding U.S. jobs in favor of productivity gains, which are substantial. Privately, they don’t believe that the President or either party in Congress is committed to building the private sector and removing the myriad barriers that are preventing growth in the U.S.
How can this dilemma be resolved? By presidential leadership, in which President Obama puts himself and his re-election on the line by taking a series of actions to restore private sector jobs and growth while cutting the deficits. President Obama is an extremely smart, savvy leader who knows what to do. Now he must take the political risk to do it because the risks to the country of inaction are far greater.
Leadership Kudos and Gaffes: Automakers lead on upping standards, while politicians distract the public
Leadership Kudos this week go the CEOs of U.S. automakers, Alan Mulally of Ford, Dan Ackerson of GM, and Sergio Marchionne for their leadership in enthusiastically agreeing to automobile fuel economy standards that will increase to 54 miles per gallon by 2025. This represents a 50 percent cut in greenhouse gases and a 40 percent reduction in fuel consumption compared with today’s averages. For the next decade or more, using energy efficiently is the best new source of energy.
Leadership Gaffes go to all the politicians who distracted the country with a confidence-shattering debate on raising the debt ceiling – an artificially- egrocreated limit – instead of focusing on the growth and job creation the country so desperately needs. No matter how the politicians spin the agreement, there are no winners here, and a lot of losers, including the faith in our country’s fiscal stability.
Leadership Kudos this week go to Caterpillar and its CEO Doug Oberhelman. Caterpillar is rapidly becoming a role model American company, showing how American companies can compete globally. With its Midwest roots and values, heavy manufacturing in the U.S. and steady long-term investments, CAT has become a global leader in its field, with large exports to Asia, Europe and the rest of the world. In its most recent quarter CAT's global revenues were up 37% and its earnings up 44%, as the company has added 6,000 American workers. More companies should follow CAT's lead.
Leadership Gaffes go to Republican Tea Party and Democratic liberal Congressmen for blocking deals negotiated by President Obama and Speaker Boehner to solve the articifically-created debt ceiling crisis. These politicians continue to put the country at risk as they maneuver for selfish political advantage.