Knowing When to Walk Away

Yesterday, we learned that Rick Wagoner, the CEO of General Motors, left his position. Depending on the news source, he either resigned at the request of the Obama administration or was ousted as a condition of continued Federal support. Either way, he’s out after 31 years with GM.

One trait of a true leader is that know when it’s time to call it quits. I don’t know Mr. Wagoner personally. But, as a casual observer, I see a man who knew it was time and accepted this gracefully. I see a man who gave his entire career to a company that faced its most difficult times while he was at its helm. I see strength of character. I see a class act. He is an example of dignity and respect.

In recent months, those of us living in metro-Detroit had to endure the public humiliation of the Mayor of Detroit. Mr. Kilpatrick’s actions were the exact opposite of Mr. Wagoner’s. He refused to go away when he time was up. In fact, he played every card he had to hold onto what was not his. He ended up in jail. He disgraced himself, his family, the office he was elected to, and the City of Detroit.

These examples of leadership could not be more different. Great leaders know when to walk away. They don’t make it all about themselves. They make it about the organization. Mr. Wagoner is leaving quietly to allow for a smooth transition in leadership, as directed by Obama and his team. It wasn’t about him. Mr. Kilpatrick publicly stated that he would never leave office and that he was the only person on the planet who could run the City of Detroit. It was clearly only about him.

Which leader are you?

Phil

Corporate Leadership

As our government begins to debate regulating executive pay, I have to wonder where our business leaders are in this discussion. They seem to be missing from the dialogue. Where are the CEOs of the Fortune 50 companies? What do they have to say?

Now, I admit that I’ve been somewhat of a headline reader lately. There’s a chance that there are some voices out there that I haven’t heard, simply because they haven’t been reported to the headline level. However, if that is the case, I wonder how effective these voices are.

In my humble opinion, corporate America is out of control- times 10. There is no reason to compensate executives at current levels outside of sheer greed. Cannot a person live on $500,000 in this country anymore? $400,000? I have to believe that a family of 12 could survive on even $300,000 and live very comfortably.

How did we get to the point where a CEO makes $10-100 million per year, or more? How could a corporate board approve this kind of compensation? What are these people thinking?

This obscene compensation not only sucks money from public corporations, it drives up comparable pay scales for all executives to levels that are uncalled for. Why does the President of a public university need to make $500,000 or more, for example? The answer is because that’s what their peers are paid. But why, I ask, and how did we allow this to happen?

I’m not a fan of government telling people how much money they can make, but until corporate America steps up with its own plan for bringing a little insanity back into the equation, government intervention may be the best option, especially during this economic crisis where public money is being wasted by greedy executives.

I firmly believe that there should be a standard for executive pay; a multiplier of the lowest paid person in the organization. For example, if the lowest paid person in my company makes $40,000 per year, my compensation cannot exceed 10 times this, or $400,000 per year. I don’t know what the multiplier should be, but I know it shouldn’t be 100 times. The insanity needs to come to an end.

Phil

Proverbs 3:33-35

33 The LORD’s curse is on the house of the wicked,
but he blesses the home of the righteous.
34 He mocks proud mockers
but gives grace to the humble.
35 The wise inherit honor,
but fools he holds up to shame.

It often seems like the odds are stacked against those of us who seek to play by the rules and do things right. It costs more, it slows us down, it puts us at a disadvantage, etc. It’s frustrating.

I have clients, for example, who have competitors that operate their businesses illegally and continually undercut him in price. It’s awful tempting to cheat, especially when it places us at a competitive disadvantage for not doing so. And yet, scripture says that the wicked will be cursed, mocked, and shamed. The righteous will be blessed, given grace, and inherit honor.

I think the real question is, “when?” That’s what we really want to know. When will the cheaters get theirs and when will we be showered with the good stuff? Inquiring minds want to know.

But, God’s timing is not our timing. We have to be patient and enduring. We can’t cave in. We can’t be led to the left or to the right. We have to stay on the one true path. That’s challenging isn’t it!

Whenever I have the urge to do something really stupid, I remember verses like this and they remind me that the short-term gain I may receive will be far surpassed if I refuse to take the bait.

How about you? How do you apply these verses to your life? It’s an interesting question with eternal consequences.

Phil

Excessive Compensation

Yesterday we watched as some of our elected officials in Washington expressed their outrage with excessive compensation for corporate executives at AIG, after its announcement of millions of dollars in bonus payouts to senior managers. They called for public hangings, 1000% taxation, and more. I’m not even exaggerating.

Today, we learned that the executive suites at Citigroup are being upgraded at the cost of millions of dollars. We also learned of millions of dollars in bonus payouts at Fanny & Freddie, the originators of the mortgage crisis.

The biggest new story today, aside from the beginning of the NCAA basketball tournament, is the public outrage over corporate compensation, especially at companies who’ve received public assistance to stay in business. However, let’s consider what is going on here, really.

Excessive corporate compensation is nothing new. It has been a fact of life in America for decades. Books, articles, and business cases have clearly exposed the lavish, self-seeking incentives that corporate executives give themselves and their associates. Of course, they always claim that they’re necessary to keep good talent. What else are they going to say? “I was just trying to stuff as much money in my wallet as I possibly could before I was exposed and booted out of here?”

Today’s outrage is misplaced. Our elected officials voted on legislation that specifically included language that allowed for these bonuses. The person who drafted the language admitted doing so. In other words, our elected officials either voted for a bill they didn’t read and understand or they’re lying to us. They are either incompetent or deceitful. They may be both. But, the public’s anger should be directed at these buffoons, not at AIG executives.

Now, I’m not saying that AIG executives aren’t also buffoons. They may be. After all, any company that is on life support and receiving public money has no business giving out a penny of bonus money, regardless of the source. Certainly, these cannot be stable individuals running this organization. They surely cannot be acting in the best interests of the company. But they may just be stuffing as much money in their wallets as possible before they’re exposed and booted out of the place! If so, let’s talk about that issue. Let’s not drink the koolaid that our pathetic elected officials have set out for us.

Phil

Bracketology

Here we are again. Time to fill out the brackets, as tomorrow the music starts and the “big dance” begins. Actually, it started last night with a “play-in” game between two high school teams. I think the score was 8 to 5 or something close to that.

So here is the conundrum (is that really a word?): if I ignore the entire bracket thing, I miss out on the potential of millions of dollars awarded to the one person who was lucky enough to enter the correct teams on the websites and hit “enter.” This has become a full-time profession for some people—seriously! But, not for me; and that is the problem. I want my team to go all the way, so I have a hard time betting against them. I also don’t any in-depth knowledge about the other teams so I can’t really make an educated decision about matchups. Finally, I don’t have any time to invest in research.

Therefore, I have developed the “Harwood Bracket System” for the big dance. Actually, the system is versatile and could be used in any play-off situation. It is simple and easy to follow. Are you ready?

There are two rules to the system. Rule #1: always select your team. How can I bet against my own alma-mater, where I toiled for many years to earn my degrees? Surely, I can’t bring myself to do this. So, the Spartans of Michigan State win every game and are the new National Champions. Just thought you should know. Rule #2: for every other matchup, flip a coin. Heads is the higher seed. Tails is the lower seed. That’s it!

Using this logic, I’m going to fill out all of my brackets today. It will take me about 5 minutes. No hassle, no research, minimal time invested. Let’s see what happens, OK?

Of course, I have another system that I’ve developed also. For those of you who know me well, this will come as no surprise. The other system is overly complicated, over engineered, and dependent on advanced statistics and probability. I can’t share this system with you. Well, I could. But I won’t.

Good luck!

Phil

Staying Focused

I think one of the most difficult aspects of life is staying focused. Regardless of the circumstances, we tend to be easily distracted by all sorts of things. Golfers are distracted while on the tee. College students are distracted while studying for mid-terms. The list goes on and on. We have a hard time focusing.

The problem is not the golf score or the mid-term grade. These things are relatively unimportant in life. The problem is with the more important things in life. We tend to get so bogged down with meaningless distractions that we miss the big picture entirely. I know I’m guilty of this from time to time. But how can we prevent this from happening and what can we do about it?

To be honest, I’m not sure we can completely prevent ourselves from being distracted or pulled away from what’s important. Realistically, we should accept that we will be knocked around a bit in life and get off track at times. Which leads me to the second question, “what can we do about it?” Or more precisely, “How can we get back on track?”

To begin with, getting back on track requires knowing which track to be on and where it’s headed. This requires some soul searching. It demands that we think about what’s important to us in the long-run. If we can understand this, then we can decide which track to be on. We can set some benchmarks for ourselves. We can create some goals and commit to tasks that will help us achieve our goals. 

Periodically, we need to stop what we’re doing and make an assessment of how we’re spending our time and what we’re accomplishing. Are we on track or not? If not, what are we going to do about it?

Right now, I feel like I’m really on track. I’m keeping my larger goals in front of me on a regular basis. I’m seeing some movement toward them. It’s tough, though. It requires dedication and resolve. It demands commitment and mental strength to remain focused.

How about you? Are you focused? If not, what are you going to do about it?   

Phil

MGIA Trade Show Afterglow

The Michigan Green Industry Association (MGIA) held its 22nd annual Trade Show & Convention this week Tuesday and Wednesday. With beautiful sunny skies, landscape and snow contractors came out in droves to attend the trade show and educational sessions. It was great.

I had the priviledge to speak Tuesday to a group of contractors, perhaps 100 or so. It was great to meet so many new people and learn about their businesses.

The staff at the MGIA is incredible. I’d like to thank them for inviting me to speak and for hosting another very successful event.

Phil