Sh*t That CEO's Say

This morning I woke up to this headline in the Globe. Good for Lululemon.

Not saying that poking fun at your target audience is a great marketing ploy – but it sure is easy!

Shit that CEO’s say (seriously):

“everything is fine”

“we. are. seriously. screwed.”

“I don’t need a consultant, I need someone to think”

“people need to stop thinking and start doing”

“seriously folks – doesn't ANYBODY here know what they're doing??! 

“what are our customers doing?"

"customers are all the same"

"our business is different"

"employees are our most important asset"

“they’re just lucky they have a job”

“it’s just getting too expensive to fire people any more”

“f—k HR! 

“we are taking this to the Board”

“do you think that anyone on the Board has any idea what they're doing?!"

“f—k the board!”

“I still like the security of the Blackberry”

“s—t, I lost my Blackberry”

“can you Google that for me?"

 "social media is a waste of time"

“what am I supposed to do with Twitter?”

“I’m on Twitter." 

"I haven’t tweeted yet.”

“f—k Twitter”

Governance: Fixing the Game

Roger Martin, famous RIM independent Director and Dean of the Rotman Business School at U of T  has written a respected book on corporate governance. It's called 'Fixing the Game'.

I haven't read it (I plan to) but recently, Forbes contributor Steve Denning ran this interesting article about Martin's book titled: The Dumbest Idea in the World: Maximizing Shareholder Value (from a quote attributed to Jack Welch).

Here's how it starts:

“Imagine an NFL coach,” writes Roger Martin, Dean of the Rotman School of Management at the University of Toronto, in his important new book, 'Fixing the Game', “holding a press conference on Wednesday to announce that he predicts a win by 9 points on Sunday, and that bettors should recognize that the current spread of 6 points is too low. Or picture the team’s quarterback standing up in the postgame press conference and apologizing for having only won by 3 points when the final betting spread was 9 points in his team’s favor. While it’s laughable to imagine coaches or quarterbacks doing so, CEOs are expected to do both of these things.”

According to the article, Martin argues that there are two markets - the 'real market' where real dollars show up on the bottom line - and the 'expectations market' ie, the stock market where dollars are traded and made based on how near or far a company is to meeting it's investor expectations.

Martin's point is that there is far more incentive for CEO's to manage the expectations market than there is for them to succeed in the real market. So managing companies becomes all about managing expectations, not about building businesses.

I agree.

Even in my modest tenure of running a too-small public company for five years, I quickly came to understand that running a business well - and running a public business well - were two completely different beasts. I frequently said to people around me that we made decisions running a public company that we would NEVER have made if it were private.

Martin goes on. He argues, according to Forbes, that "we must shift the focus of companies back to the customer and away from shareholder value”. "If you take care of customers, shareholders will be drawn along for a very nice ride.", quotes Forbes.

I don't disagree with Martin - how can you?

It seems to me (here it comes) that there might be no greater evidence that his argument is correct than the value that RIM created up to mid-2008 when customers embraced their smartphone/mobile e-mail invention and subsequently destroyed by ignoring customers evolving expectations thanks to the launch of the iPhone.

Research In Motion Market Cap Chart by YCharts

Research In Motion Market Cap Chart by YCharts

Given Martin's point of view, one has to assume that he is working feverishly in the background at RIM - clearly not to manage expectations, but to ensure that management truly understands what customers want - and is skillfully building an operating system and new hardware to capitalize on it.

I keep thinking that Martin (and others associated with RIM) need(s) to be careful.

His book may be great, but if RIM doesn't turn around it will forever be the asterisk on his reputation*.

*had great ideas, even wrote a good book - but failed to execute

Governance: The Directors on RIM's Board

The failure of RIM isn't just a failure of management, strategy and execution. It's also a massive failure of governance.

While it's likely there's a phone call or two going on behind the scenes, RIM's Director's have clearly failed to influence the failed trajectory of this once-great company. Even by RIM's own definition of the role of the Board, it's easy to argue that RIM's Directors have been MIA.

So who are these people? Are they just a bunch of Mike and Jim's buddies - maybe a hockey player, a cyclist and a mad-scientist or two? Maybe they are a couple of local machine shop operators from Waterloo's past who stumbled onto the RIM rocket ship and don't know what do now that the gyros have gone loopy?

Well actually not.

Barbara Stymiest is the ex-CEO of the TSX. According to the RIM information circular, Stymiest serves as a member of the Group Executive of the Royal Bank which is responsible for the overall strategic direction of the bank! She's a member of the George Weston Board.

Roger Martin is a Dean and Professor of Strategy (!) at the Rotman School of Business! He also sits on the Board of Thomson Reuters.

According to RIM's info circular, Claudia Kotcha is "an independent consultant to Fortune 500 companies on innovation, strategy and design".

Innovation, strategy and design! That's like the triumvirate of doom for RIM.


So. Is there any governance experience on the RIM Board?

Well, there's John Richardson. This isn't exactly his first rodeo. From the RIM info circular:

"He was appointed Chairman of the Ontario Pension Board in July 2004 and retired from that position at
the end of his three year term in June 2007. Mr. Richardson was Deputy Chairman of London Insurance Groups Inc., Chairman, President and Chief Executive Officer of Wellington Insurance, and Chairman of
London Guarantee Insurance Company. He was a past board member with The Insurance Bureau
of Canada and the Facility Association. In addition to the public board memberships indicated
below, Mr. Richardson is currently the Chairman of Boiler Inspection and Insurance Co."

Others on the RIM Board have similar great experience.

John Wetmore is the former President and CEO of IBM Canada. He currently sits on the Board of Loblaw.

Antonio Viana-Baptista is an ex-McKinsey consulting guru and sits on four other Boards in the telecom space.

And then there are the two co-CEO's.

It's obviously difficult to believe that a Board with this much experience is simply sitting around and watching things pile down on top of them. However, shareholders must be wondering what the Board is up to, especially now that it's clear there may be no bottom for the share price.

One also wonders about the impact on personal reputations given what's already happened or what might happen to RIM's business. What does it say for a Dean of the Rotman Business School? Or a Director of Loblaw? Or someone tied so closely to the Royal Bank? Many people didn't realize that Stymeist and Martin are even on the RIM Board. Just from a self-preservation perspective you might think they would find a way to either step up - or away - from what's happening.

 For shareholders it can't be too soon for someone to do something.

Sunday Burning Issues! Swampland in Florida, Women's Networking, More

• Just back from Florida. Sarasota. Got to chat with an actual banker (Iberia) at a bar in Sarasota. He told me that real estate in Florida still isn't going anywhere fast. Don't rush. He's renting a 2 bedroom condo (owns a home elsewhere in Florida) in a beautiful building just up the street from the Ritz in Sarasota. Price? $1300 all in including TV!

• Long discussions with a friend in the financial services business. Key issue he's seeing - his top producers are getting old. A large number of them will be retiring in the next 10 years. Tradition in the industry the past few years has been filling gaps by stealing from other firms, not train newbies. That's not going to work much longer - they're all getting old. So, big question - how to ramp young blood and get them ready to take on some great great, demanding clients. My advice - look outside the industry at how others intake large numbers and get them ready. Start now.

• Women's networking is on my mind as a result of our work here at Boardroom Metrics. Women want to be with women. It makes them more comfortable. Which I guess is why there are so many women's networking groups. So let me ask a taboo question - are women/how much are women doing themselves a disfavour networking primarily with women? Even if women hold 50% of the top jobs in corporate North America (which they don't), isn't it better to network with women AND MEN? Just asking.

• RIM is still around. For those not into Canadian cheerleading of the Company, here's today's article from Forbes. Bottom line. There are no buyers and there is no bottom.

Thanks Jack Astors!

Recently, I met a colleague at Jack Astors. To be fair, it's not my first time there!


When you ask for the wifi username and password, it's comes with this wonderful little explanation:

Thank you for visiting us today. We offer this time limited wireless access service at no charge and we offer it on an as is basis with no support services. We appreciate your business and we want you to have a good experience using this service but we do not employ computer experts in our restaurants so you must help yourself. Having said that, we would like to offer some steps that should help you establish a connection to our wi-fi service. These steps are not meant to be comprehensive instructions, just helpful hints in case you need some assistance. We ask that you please not ask your server for assistance as they are not trained to assist you with this service.

I've been trying to figure out why I like this so much - it is just the wifi instructions after all. Thinking:

1. it's clear
2. it's appreciative
3. it's honest 
4. it's got personality
5. it says 'we get it'
6. it's helpful
7. it's well written
8. it's not overwritten
9. it's good for their staff
10. it's good for their customers

This simple, well done execution actually helped me feel better about the Jack Astor's brand. That's something I'm sure won't surprise my customer experience friends but is frankly a little scary given how almost insignificant it is in the scheme of running a Jack Astors - or any operation.

Better buy whoever wrote it a beer!

Assessing RIM's Approach to Corporate Governance

Yesterday, RIM's stock closed at somewhere near $19 on the TSX. The stock has fallen off so much that the value of the Company hovers around it's book value.

As a key role of the Board of Directors is to protect share holders, it got me wondering about how well RIM's Board has performed it's governance duties - and why there hasn't been more focus on RIM's Board.

Based on RIM's definition of the role of their Board from their website, here's my assessment:

Board Responsibilities from RIM Company Site	Rating (1 low – 5 high)	Rationale
Ensure that a culture of integrity is created throughout the organization	1	Not taking accountability for the Company's performance is a powerful signal.
Oversee and approve the Corporation’s strategic initiatives and implementation of such initiatives	1	Key strategies have failed and implementation (BBX, Playbook) has been chaotic and disappointing.
Assessing the principle business risks of the organization.	1	The Company's product and infrastructure strategies are key risks the Board apparently missed.
Overseeing the Company’s compliance activities, including the areas of legal/regulatory compliance…	3	The Company appears to meet it’s basic legal/regulatory obligations however it’s approach to disclosure (below) is questionable.
Monitoring the Co-Chief Executives performance.	1	Tough to argue that the co-CEO's have performed well. Even worse, the co-CEO's are also the Co-Chairs of the Board, making it impossible for the Board to fulfill this responsibility.
Adopting and monitoring a disclosure policy for the organization.	1	RIM has consistently failed to announce the departure of key senior execs, raising a question about what else the Board has deemed not material.
Monitoring the integrity of internal control and management information systems	?	Hopefully.
Developing the Corporation’s approach to Corporate governance	1	What approach to Corporate governance?

Following up the Sock Thing

A couple of weeks ago I wrote about tangled cords on our electronic devices. Having solved that mystery, I finished the post by saying I was about to search Google for the mystery of missing socks.

I was kidding.

However, I'm easily distracted and with a little encouragement I've done it. And, there is no answer.

But. I saw a great work-around.

The sacrificial sock.

Instead of tossing a simple pair of (2) socks into the wash or dryer, toss three. Not only is it a great use of those orphan socks, it helps protect the integrity of the pair. It's a truly inspired idea.

Which got me thinking of sacrificial other stuff. Like my friend, Mr. Amazing BBQ dude. When I asked him how how he does it perfectly every time he said "simple. Sacrificial steak. I always have an extra one (or it could be yours) that I cut into while it's cooking.".

Which explains a lot.

Then there's the sacrificial blog post. Like this one!

Have a great day!