Category: Management

E.S.G.–“Extremely Silly Grandstanding”

Source of graphic: online version of the NYT article quoted and cited below.

(p. B1) E.S.G. — which refers to environmental, social and governance standards — has become a point of contention for red-state legislators defending the fossil fuel industries that employ their residents.

. . .

(p. B4) So what is E.S.G., anyway? As investors rename their firms and their funds in a race to ride the E.S.G. wave, cynics see the debate over the term’s definition as degenerating into everyone seeing gibberish. Because funds can define E.S.G. nearly any way they want, they have come to resemble an extra-strange goulash. Sometimes, these new or newly rebranded operations are just elegantly simple greenwashing and nothing more.

For the full commentary, see:

Ron Lieber. “YOUR MONEY; Bankers Are Suing Lawyers In Kentucky’s E.S.G. Battle.” The New York Times (Saturday, February 25, 2023): B1 & B4.

(Note: ellipsis added.)

(Note: the online version of the commentary has the date February 24, 2023, and has the title “YOUR MONEY; The E.S.G. Fight Has Come to This: Bankers Suing Lawyers.”)

Elon’s “Musketeers” Will Gladly Commit to “Long Hours at High Intensity”

(p. A12) Your boss probably hasn’t demanded a loyalty pledge and almost certainly doesn’t own a rocket ship, but the person calling the shots at your company might be more like Elon Musk than you realize.

. . .

What is consistent—and alluring to some bosses—is the billionaire’s unapologetically high standard for employees. He spelled it out last week in an emailed ultimatum, saying that Twitter employees must commit to “long hours at high intensity” or leave with three months’ severance.

. . .

Managers who think the working world has gone soft in recent years, with all the talk of flexibility and work-life balance, say they envy Mr. Musk’s unfiltered style and share his craving for maximum effort—even if they wouldn’t act quite as forcefully as the world’s richest person.

. . .

. . . he is the rare CEO with a fan base—“Musketeers,” as this male-dominated bunch is known—and might be able to fill the company’s ranks with devotees who believe in his vision of a more freewheeling and profitable platform and are willing to grind.

. . .

“He can do whatever he wants, and everyone that has an opinion about it can piss off,” says Derek Grubbs, director of sales development at Crux Informatics, a software company. “If everybody exits from Twitter, there are plenty of other people who will be ready to enter because it pays well, and working for Elon Musk has a flair to it.”

For the full commentary, see:

Callum Borchers. “ON THE CLOCK; The Bosses Who Want to Emulate Elon Musk.” The Wall Street Journal (Wednesday, November 23, 2022): A12.

(Note: ellipses added.)

(Note: the online version of the commentary has the date November 22, 2022, and has the title “ON THE CLOCK; Is Elon Musk Your Boss’s Anger Translator?”)

As Sole Owner Musk Was Able to Act Quickly to Cure Twitter’s “Systemic Paralysis”

(p. A17) Since Elon Musk purchased Twitter, he has undertaken a rapid restructuring that few large technology companies would attempt unless faced with an immediate liquidity crisis. Minutes after closing his purchase of the company, he started a process that reduced the workforce from 7,500 to 2,500 in 10 days.

Media pundits immediately slammed him, arguing that his slash-and-burn strategy would destroy one of the world’s most important social-media platforms—already in danger under the burden of $14 billion in debt. Much of this criticism came in the form of tweets, as the irony of using Twitter to denounce Twitter apparently escaped Mr. Musk’s critics. But the restructuring of Twitter won’t destroy the company.

Mr. Musk is trying to cure a degenerative corporate disease: systemic paralysis. Symptoms include cobwebs of corporate hierarchies with unclear reporting lines and unwieldy teams, along with work groups and positions that have opaque or nonsensical mandates. Paralyzed companies are often led by a career CEO who builds or maintains a level of bureaucracy that leads to declines in innovation, competitive stature and shareholder value.

Mr. Musk set his new tone immediately. He eliminated a 12-member team responsible for artificial-intelligence ethics in machine learning, the entire corporate communications department, and a headquarters commissary that cost $13 million a year (despite prior management’s pandemic decree that Twitter employees would be “remote forever”).

Three attributes give Mr. Musk a better chance of rebuilding Twitter into an innovative force in social media: He is an operator, an engineer and a sole owner.

For the full commentary, see:

Rob Wiesenthal. “Elon Musk Slashes Bureaucracy, Giving Twitter a Chance to Soar.” The Wall Street Journal (Friday, Dec. 9, 2022): A17.

(Note: the online version of the commentary has the date December 8, 2022, and has the same title as the print version.)

Workers Who Feel They Matter Are More Satisfied with Their Lives and Are “Less Likely to Quit”

(p. C5) So how do you know if your employees and co-workers feel that they matter? In a 2021 study published in the Journal of Positive Psychology, researchers developed a scale to measure mattering in the workplace. In online surveys involving nearly 1,800 full-time employees at a variety of companies, participants were asked to rate on a 5-point scale how much they agreed with statements such as “My work contributes to my organization’s success” and “The quality of my work makes a real impact on my organization.” Other statements had to do with feeling valued and recognized: “My organization praises my work publicly” and “My work has made me popular at my workplace.”

Participants were also asked about job satisfaction, recent raises or promotions, and whether they intended to leave their job. What the researchers found was that mattering isn’t only good for employee well-being, it’s also good for a company’s bottom line. Employee turnover is costly and disruptive, and “when employees feel like they matter to their organization, they are more satisfied with their jobs and life, more likely to occupy leadership positions, more likely to be rewarded and promoted and less likely to quit.”

. . .

Research by Dr. Prilleltensky and colleagues shows that being treated fairly increases workers’ sense of mattering, . . .

For the full commentary, see:

Jennifer Breheny Wallace. “The Power of Mattering at Work.” The Wall Street Journal (Saturday, Dec. 3, 2022): C5.

(Note: ellipses added.)

(Note: the online version of the commentary has the date December 1, 2022, and has the same title as the print version.)

Jack Welch’s Protégés “Were Just Cost Cutters”

(p. 8) . . . in more than 100 conversations for “The Man Who Broke Capitalism,” my new book, from which this article is adapted, a broad range of people said some version of the same thing: While it has been more than two decades since Mr. Welch was C.E.O. of G.E., his legacy still affects millions of American households.

. . .

For a time in the early 2000s, five of the top 30 companies in the Dow Jones industrial average were run by men who had worked for Mr. Welch. “That’s why they got hired,” said William Conaty, G.E.’s longtime chief of human resources. “Because they had the playbook. They had the G.E. tool kit. And boards back then thought that was the answer.”

. . .

The Welch protégés who struck out on their own rarely fared well. At Home Depot, Albertson’s, Conseco, Stanley Works and many other companies, the same story seemed to repeat itself ad infinitum.

A G.E. executive was named C.E.O. of another company. News of the appointment sent the stock of that company soaring. The incoming leaders were lavished with riches when they took their new jobs, signing multimillion-dollar contracts that ensured them a gilded retirement, no matter how well they performed. A period of job cuts usually ensued, and profits sometimes rose for a few quarters, or even a few years. But inevitably, morale cratered, the business wobbled, the stock price sank and the Welch disciple was sent packing.

“A lot of G.E. leaders were thought to be business geniuses,” said Bill George, the former C.E.O. of Medtronic. “But they were just cost cutters. And you can’t cost cut your way to prosperity.”

For the full essay, see:

David Gelles. “Jack Welch and the Rise of C.E.O.s Behaving Badly.” The New York Times, SundayBusiness Section (Sunday, May 22, 2022): 1 & 7-8.

(Note: ellipses added.)

(Note: the online version of the review was updated June 27, 2022, and has the title “How Jack Welch’s Reign at G.E. Gave Us Elon Musk’s Twitter Feed.”)

The essay quoted above is adapted from Gelles’s book:

Gelles, David. The Man Who Broke Capitalism: How Jack Welch Gutted the Heartland and Crushed the Soul of Corporate America―and How to Undo His Legacy. New York: Simon & Schuster 2022.

Office Space Designers Finally Pull Back from Extreme “Open” Space that Forces Collaboration at the Price of Blocking Concentration

(p. 1) First there were individual offices. Then cubicles and open floor plans. Now, there is a “palette of places.”

. . .

. . . the move toward pure open floor plans that packed more workers into less and less space . . . was supposed to drive collaboration, but many experts agree it often went too far, with row upon row of desks and workbench-style seating more likely to generate ennui than efficiency.

. . .

The new model is largely open, but not entirely. Under the revised thinking, breaking down walls to bring people together is good, but so are “team spaces” and standing tables, comfortable couches and movable walls.

Privacy is also good, particularly for tasks that require intense concentration, the thinking goes. That doesn’t mean a return to the glory days of private offices, but it does mean workers have more space and more places to seek solitude than in the neo-Dickensian workbench settings. The new designs often include “isolation rooms,” soundproof phone booths, and even lounges where technology is forbidden.

. . .

(p. 4) But in 2010, Microsoft started testing open designs with a quarter of a floor, and then expanded. Since 2014, it has opened 10 renovated buildings without offices, including four this year.

Microsoft, Mr. Ford said, has taken a test-and-learn approach. It learned, for example, that its early designs were too open plan, with 16 to 24 engineers in team-based spaces. Engineers found those spaces noisy and distracting, and concentration suffered. Too much openness can cause workers to “do a turtle,” researchers say, and retrench and communicate less — colleagues who retreat into their headphones all day, for example.

Today, there are more private spaces, and the team areas hold only eight to 12 engineers. “That’s the sweet spot for Microsoft,” Mr. Ford said.

The company thinks it is working. Microsoft’s Azure cloud software business has surged in the last few years, as has the company’s stock price. Mr. Ford said about 20 percent of the workplaces have been redone on Microsoft’s campus in Redmond, Wash., and the surrounding area. Within five years, he said, he expects the renovated share to reach 80 percent.

For the full story, see:

Steve Lohr. “Don’t Get Too Comfortable at That Desk.” The New York Times, SundayBusiness Section (Sunday, October 8, 2017): 1 & 4.

(Note: ellipses added.)

(Note: the online version of the story has the date Oct. 6, 2017, and has the same title as the print version.)

Both Insourcing and Outsourcing Can Be Successful Strategies

(p. A13) In “Profit From the Source,” four Europe-based partners at Boston Consulting Group—Christian Schuh, Wolfgang Schnellbächer, Alenka Triplat and Daniel Weise—make the case for drastic change. Procurement, they assert, has been badly neglected: “When the boss offers someone a job in procurement, they know they’re on the fast track to nowhere.” Top executives, they claim, spend far too little time with suppliers, even though purchasing swallows more than half of the average company’s budget. “That’s a mismatch with potentially existential consequences,” they write. Instead, they insist, companies should put procurement at the center of corporate strategy.

. . .

Serving up familiar stories about the likes of Apple and Tesla, the authors write admiringly: “The world’s most successful companies . . . make virtually nothing themselves. They are, in effect, the consumer-facing, brand-owning centripetal force at the core of a business ecosystem.” But many companies have been moving in the opposite direction. In recent years, Facebook (now Meta) began designing chips for the servers in its data centers; Costco built a slaughterhouse to ensure its stores’ supply of chickens; and Cleveland-Cliffs bought steel mills to supply from its iron mines. Much of the business world seems to think that outsourcing has gone too far. Should the chief procurement officer help identify ways to bring parts of the supply chain back in house? The authors don’t say.

For the full review, see:

Marc Levinson. “BOOKSHELF; Consider The Supplier.” The Wall Street Journal (Saturday, July 29, 2022): A13.

(Note: ellipsis between paragraphs, added; ellipsis within paragraph, in original.)

(Note: the online version of the review has the date July 28, 2022, and has the title “BOOKSHELF; ‘Profit From the Source’ Review: Consider the Supplier.”)

The book under review is:

Schuh, Christian, Wolfgang Schnellbacher, Alenka Triplat, and Daniel Weise. Profit from the Source: Transforming Your Business by Putting Suppliers at the Core. Boston, MA: Harvard Business Review Press, 2022.

Claremont Censors Professor for Quoting Mark Twain’s Huckleberry Finn

The courageous and decent hero of Mark Twain’s Huckleberry Finn is the black slave Jim. To censor this work because of its vocabulary, spectacularly misses Mark Twain’s point. How many of those who censor Huckleberry Finn have actually read Huckleberry Finn?

(p. A15) Claremont, Calif.

I teach at Claremont McKenna College, the No. 1-ranked liberal-arts college for free speech by the Foundation for Individual Rights and Expression. FIRE may need to consider its ratings.

On Oct. 4, 2021, my class discussed Plato’s “Republic” and his views about censorship. A student objected that Plato was mistaken about its necessity. Here in the U.S., she said, there is none. Someone brought up “Huckleberry Finn.” She replied, correctly, that removing a book from curriculums doesn’t constitute censorship. I pointed out that the case was more complicated. The book had also been removed from libraries and published in expurgated editions.

An international student asked me why. I told her, quoting Mark Twain’s precise language, which meant speaking the N-word.

. . .

. . ., the dean enlisted the help of both the department chairman and a co-director of the college’s Open Academy program—a resource center that describes its purpose as “to counter the forces that are pulling us apart with educational strategies that bring us together”—to ban me from teaching any required courses in the future, seemingly into perpetuity.

. . .

The administration’s behavior toward me and two similar cases in the literature department seem to show that CMC sets the bounds of faculty speech arbitrarily. This spring, a literature adjunct read aloud and asked students to discuss a passage from “The Color Purple” that contained the N-word. They complained. Ms. Antecol summoned the adjunct, who apologized and agreed to undergo recommended counseling. The professor submitted to re-education and training in critical race theory. Despite all this—and a glowing recommendation by the faculty member who observed her course—the class the adjunct was set to teach at CMC in the fall was abruptly canceled.

When a tenured literature professor, who is also well-connected to the board of trustees and the media, committed a similar offense, he received no penalty. Last fall the professor assigned Robert Lowell’s poem “For the Union Dead,” which contains the N-word. When he played in class a recording of Lowell reading the poem, a student exploded, excoriating both author and teacher as old white men. The associate vice president for diversity and inclusion informed the professor by telephone, not in writing, that he was in the clear because he hadn’t himself read the forbidden word aloud in class.

The effects of the administration’s actions are disastrous and lasting. Students, already fearful to speak their minds, become even more so when they see that certain peers can veto the content of courses and conduct of teachers arbitrarily.

. . .

My job as a teacher is to oppose ignorance wherever it manifests itself. If a dean promotes the work of Daniele da Volterra, Pope Paul IV’s painter of fig leaves, I have no choice but to stand for the original of Michelangelo. And so must I stand for the original works of Mark Twain and Frederick Douglass, exactly as written by their authors. They deserve that, as do my students.

For the full commentary see:

Christopher Nadon. “Censorship at a Top College for Free Speech.” The Wall Street Journal (Tuesday, Aug. 23, 2022): A15.

(Note: ellipses added.)

(Note: the online version of the commentary has the date August 22, 2022, and has the same title as the print version.)

A thrifty edition of Mark Twain’s humane masterpiece is:

Twain, Mark. Adventures of Huckleberry Finn. Mineola, NY: Dover Publications, Inc., 1994 [1885].

Maverick Rickover Was Dedicated to the Project of a Nuclear Powered Navy

Several years ago, a student in my entrepreneurship seminar asked if he could do his paper on Admiral Rickover. I am glad that I finally said “yes.”

(p. C9) . . ., in “Admiral Hyman Rickover: Engineer of Power,” Marc Wortman delivers a 17-gun salute to this short, profane spitfire who pulled a reluctant Navy into the atomic era.

. . .

Though physically courageous, Rickover, according to one of his commanding officers, showed “no outward signs of qualities of leadership.” In the late 1920s, he spent a year studying electrical engineering at Columbia University.

. . .

It can be difficult for landlubbers to grasp the significance of nuclear power to a navy. Freed from the shackles of fuel tenders, a nuclear-powered submarine can “slide into the depths and maintain top speeds for weeks or even months without need for recharging fuel, air, or battery,” Mr. Wortman notes. “Atomic-powered submarines represented a seafaring and naval warfare leap as fundamental as that from sail to steam.”

. . .

[Rickover’s] experience at Columbia imbued him with an unconventional attitude toward authority when he headed the Navy’s nuclear-propulsion group. At the Atomic Energy Commission’s Division of Naval Reactors, “he abolished rank and uniform,” Mr. Wortman writes. “ ‘There is no hierarchy in matters of the mind,’ Rickover said, and he insisted that all were ‘permitted to do as they think best and to go to anyone and anywhere for help. Each person is then limited only by his own ability.’ ”

But he also demanded accountability and was a Captain Bligh to the men he selected to run his reactors. Addressing one group of newly minted engineers, Rickover “jumped his then-seventy-seven-year-old body up on a tabletop, stomped with rage like an angry djinn, and screamed at the top of his lungs, ‘I understand genetics. If you make a mistake with my nuclear plant, it’s because your mother was a street whore who trawled for tricks with a mattress on her back!’ ” His Pattonesque benediction concluded: “On penalty of all you hold dearest, do not fail to live up to my standard of perfection.”

His maverick approach threw off sparks when it rubbed against military structure. “Navy and government officials bristled at Rickover’s rebellious nature, indifference to the chain of command, and frequent workarounds,” Mr. Wortman writes. “He was obstinate, egotistical, and abrasive, a specialized engineer indifferent to and sometimes actively in rebellion against the Navy’s chain of command, protocols, and culture. By pushing the Navy into technology frontiers, his nuclear-power program proved alien to existing thinking.” Passed over for promotion twice, the ill-tempered Rickover relied on supporters in Congress and the White House to move up to admiral and remain in uniform past retirement age.

For the full review, see:

Jonathan W. Jordan. “The Navy’s Atomic Generator.” The Wall Street Journal (Saturday, Feb. 12, 2022): C9.

(Note: ellipses, and bracketed name, added.)

(Note: the online version of the review has the date February 11, 2022, and has the title “‘Admiral Hyman Rickover’ Review: The Navy’s Atomic Generator.”)

The book under review is:

Wortman, Marc. Admiral Hyman Rickover: Engineer of Power. New Haven, CT: Yale University Press, 2022.

Union Blocks Automation That Would Make Ports More Resilient and Efficient

(p. B6) The companies that transport and handle the cargo say the automation is one solution to the congestion at ports, particularly the Los Angeles and Long Beach sites at the heart of America’s supply chain woes. The spare use of robotics at U.S. ports leaves them uncompetitive with big gateways in China and Europe that are packed with automation, they say.

Jeremy Nixon, chief executive of Singapore-based container line Ocean Network Express, told the TPM22 Conference produced by The Journal of Commerce in Long Beach earlier this year that European and Asian ports can clear backlogs quickly because they have automated cargo-handling equipment that operates around the clock. “Here, we just don’t have that resilience,” he said.

. . .

A port performance index created by the World Bank and S&P Global Market Intelligence ranked the Los Angeles and Long Beach port complex dead last in efficiency among the world’s ports last year, trailing Luanda, Angola, and the Port of Ngqura, South Africa. The world’s most efficient ports were in the Middle East and Asia.

For the full story, see:

Paul Berger. “Port Union Talks Center on Automation.” The Wall Street Journal (Friday, June 10, 2022): B6.

(Note: ellipsis added.)

(Note: the online version of the story has the date June 9, 2022, and has the title “A Deep Divide on Automation Hangs Over West Coast Port Labor Talks.”)

When HR Team-Building Is on Fire

(p. B2) Walking barefoot across hot coals, an ancient religious ritual popularized in recent years as a corporate team-building exercise, has once again bonded a group of co-workers through the shared suffering of burned feet.

In the latest case of the stunt going wrong, 25 employees of a Swiss ad agency were injured Tuesday [June 14, 2022] evening while walking over hot coals in Zurich, officials said. Ten ambulances, two emergency medical teams and police officers from multiple agencies were deployed to help, according to the Zurich police. Thirteen people were briefly hospitalized.

. . .

Mr. Willey, who taught for years at the University of Pittsburgh, once shared the world record for the longest distance walked on hot coals.

The promises made by corporate retreat organizers are frequently unjustified, Mr. Willey said.

“They’re telling you that it’s all in your mind, and this will give you powers that will continue,” he said. “It’s not in your mind. Anybody can do it. And I don’t think the confidence you get from it is necessarily going to last that long.”

Mr. Willey said that coals at 1,000 degrees are safe to walk on for 20 feet or more, adding that he walked on coals at that temperature for 495 feet without getting a blister.

On his website, he writes that at a brisk walk your bare foot comes into contact with coals for just around a second, which is not enough time for heat to be transmitted painfully from coals to the human flesh. Both the coals and skin have vastly lower thermal conductivity than, for instance, metal, he said.

But mistakes can lead to injuries. These include curling your toes and trapping a coal between them; walking on coals that are too hot; choosing the wrong type of wood, since some get hotter than others; and performing a fire walk on a beach, where your feet might sink into sand, Mr. Willey said.

For the full story, see:

Alex Traub. “Company’s Team-Building Exercise Involved Hot Coals. It Ended Badly.” The New York Times (Monday, June 20, 2022): B2.

(Note: ellipsis, and bracketed date, added.)

(Note: the online version of the story has the date June 17, 2022, and has the title “Walking on Hot Coals: A Company Event Goes Wrong.”)