CEO Corner

Marc Benioff Spoke Out Through Raw Economic Power

Chief Executive Magazine -

Salesforce CEO Marc Benioff. Photo credit: Salesforce

If there’s one thing that’s tough to beat when it comes to successful CEO Goodism, it’s raw economic power. Case in point: Salesforce CEO Marc Benioff and Indiana.

When the $10 billion revenue tech giant acquired Indianapolis-based online marketing firm ExactTarget five years ago, it transformed the city into a Heartland tech capital almost overnight. Indy now hosts Salesforce’s second-biggest concentration of workers, behind only San Francisco, and the company’s occupation of the former Chase Tower downtown has beckoned many other tech firms to the Indiana capital.

But in 2015, Indiana’s state legislature passed a law that allowed businesses to refuse service to gay and lesbian customers under religious freedom protection, and then-Governor Mike Pence signed it. Benioff wasn’t pleased.

“Today we are canceling all programs requiring our customers and employees to travel to Indiana to face discrimination,” he tweeted.

Within days, a group of heavy-hitter local CEOs, including then-chief John Lechleiter of Eli Lilly and Tom Linebarger of Cummins, were trying to reconcile the new law with their companies’ stances, a city “human rights” ordinance and Benioff’s concerns.

“We were able to bring a certain pragmatism to the discussion about the law’s long-term impact on retention and attraction of talent for key economic sectors,” says Michael Huber, president and CEO of the Indianapolis Chamber of Commerce, who headed a “war room” at his offices for a week as CEOs and others worked on a solution.

The “fix” was to amend the law to explicitly protect sexual orientation and gender identity, and Pence and the legislature agreed to it. While Salesforce executives weren’t entirely satisfied, they love Indianapolis as the company’s effective second headquarters.

“Indiana just really needed to indicate that it was going to be a state that fought for people’s rights and would be fair and just,” says Bob Stutz, CEO of the Salesforce Marketing Cloud operation in Indianapolis.

The post Marc Benioff Spoke Out Through Raw Economic Power appeared first on

Campbell Soup CEO Resigns: A Warning for Acquisitive Leaders

Chief Executive Magazine -

Denise Morrison, former CEO of Campbell Soup Company

The abrupt departure of Denise Morrison from the top job at Campbell Soup carries a handful of warning signals for other CEOs, inside and outside the packaged-foods industry. Maybe the biggest caveat is that directional change for a traditional industry giant can be very difficult – even unsuccessful – if the execution isn’t as brilliant as the vision.

The 64-year-old Morrison ended her seven-year tenure as chief at Campbell, and a 15-year run at the company, after the board determined that her execution was poor. The biggest problem was what remains the most important statistic for the company: soup sales. Even after years of Morrison trying various new ways to get millennials to eat Campbell soups, sales in that age group were down by 1.9 percent over the last year, while rival brands were up by 3.8 percent and private-label soup sales rose by 11 percent.

“We must take a fresh look… with urgency,” said board member and new interim CEO Kevin McLoughlin. “Everything is on the table… there are no sacred cows.”

But another major failure under Morrison may have been just as telling: the little traction she got from a trail of major acquisitions and small investments over the last several years. The aim of those acquisitions was to jump-start growth and innovation by broadening Campbell beyond its traditional packaged-goods brands into fresh and new food forms, and even services, that were thriving.

This is an increasingly popular option being used by CEOs to accelerate growth, even amid a booming economy. In fact, 46 percent of CEOs just surveyed by KPMG said they plan to use accelerator or incubator programs for startup firms to augment growth over the next few years.

Morrison used large acquisitions to diversify a brand and product portfolio that mostly consisted of processed soups, V8 juices, Prego pasta sauce, and Pepperidge Farm snacks. She acquired Bolthouse Farms, the vegetable and juice brand; Garden Fresh salsa and hummus; Pacific Foods, an organic soup company; and Plum Organics baby and toddler food. She also launched an investment fund for Campbell to work with innovative startups and smaller brands and acquired a stake in Chef’d, a meal-delivery company.

But Morrison either didn’t reckon with, or couldn’t overcome, the execution challenges that awaited her as CEO. The company didn’t do a very good job of integrating all of these acquisitions into a seamless company, neither for the benefit of the acquired brands nor for the broader benefit of Campbell. Clearly there was a problem of cultural fit between Campbell and the startups — in comparison with how Coca-Cola, for example, was able to integrate Honest Tea or how Unilever has integrated the myriad startups it has recently acquired.

So the company was forced to write down the value of the Bolthouse and Garden Fresh acquisitions by hundreds of millions of dollars over the last few years, blaming issues such as drought in California and distribution challenges with Garden Fresh.

And so rough were these fits that, with her last and biggest acquisition, Morrison seemed to throw up her hands: Campbell bought Snyder’s-Lance, a leader in traditional and calorie-laden salty snacks, on the complete opposite end of the nutritional spectrum from her other big purchases.

“Denise did a very good job of rallying the troops to understand what the challenges were that were before the company, and she had a very solid understanding of what Campbell Soup needed to do in order to compete in today’s environment,” Ken Harris, managing director of Cadent, a major CPG brand consulting firm, told Chief Executive. “But unless there’s a very clear understanding of the go-forward next steps – that are embraced by the whole organization and executed with excellence – other CEOs are going to have the same kind of difficulties.”

It’s important to note, Morrison’s difficulties were inherent in the role and would have challenged anyone looking to turn around one of America’s most iconic food companies. “The reality,” Harris said, “is that some of those efforts fell short, and you can’t have six quarters of sub-par performance and expect that people will continue to be patient—for anyone. It’s not really about Denise.”

Read more: Marvin Ellison: From Frying Pan To Fire—When To Make A Move As CEO

The post Campbell Soup CEO Resigns: A Warning for Acquisitive Leaders appeared first on

Crew CEO Danny Leffel On Why Empathy And Shared Understanding Is Critical

Chief Executive Magazine -

Danny Leffel is a bit of a serial entrepreneur, having founded and built four companies in the tech world in the past decade-and-a-half. His latest venture is Crew, a communications app for desk-free workers (think restaurants, retail, hotel and emergency services employees) that helps to keep these critical teams on the same page. The app is being used by employees at Macy’s, Staples, Domino’s, McDonald’s, CVS and others, and is helping increase growth and reduce turnover at companies leveraging the solution.

According to Leffel, creating a culture of empathy is critical in successful businesses, as no amount of success can be sustainable unless the growing team works well together. Chief Executive spoke with him about that, as well as the importance of employee communication and the evolution of his leadership style.

Since there is no standard enterprise communication tech solution for desk-free workers, what should business leaders know about the Crew app solution and what it can do for businesses that rely on these kinds of employees?

We try to create a single place for any company to organize themselves and all of their communications and to keep everybody on the same page. Crew is an app in that sense that I like to say is creating shared understanding on teams, and it’s an important leadership quality because sharing understanding means when everybody understands the big picture, knows how their efforts are going to contribute to the goals, and everybody knows where they need to be and when they need to be there, and so that everybody can be split up to have a successful day at work.

And so for so many of the businesses that we serve where you have frontline employees who are either communicating with customers and creating the customer experience or are interacting with the raw materials that make final products that are sold, these are the people that really control in a big way what these products and services look and feel like to customers. And so when you create shared understanding amongst those teams, it should not surprise me they do their jobs better and they get access in these workplaces to the same types of benefits that we’ve enjoyed in environments where we are, where we’re issued laptops in companies and email addresses.

And, yeah, it’s a problem that a lot of people haven’t heard of come about, and the reason for that is really simple. In these workplaces, workers sort of needlessly accept that this is just the way it is, that if you work on any job, communication sucks and we know that doesn’t have to be the case. We started working on Crew three years ago and in that time, we’ve grown to over 10,000 organizations who use Crew and they generate over 10 million communications a week at this point. That’s like when they make announcements or assign a task or cover a shift or request time off or any of the other things that you can do to interact in your workplace.

“When our whole team has shared understanding, everybody knows why they need to do what they’re being asked to do and they’re empowered to ask fewer questions and just go and do because they know the answers.”

How has your leadership style evolved over the years?

One of the things that I tell people over and over and over again is that I feel like one of my top jobs as a CEO is to create shared understanding. And I use that in the context of the app and it’s sort of funny because when you’re building a company and you’re building at the same time an app that is for helping companies to run effectively, you end up introducing your leadership style and your cultural style directly into the app, as well. So you end up creating an app that productizes, to some degree, your leadership style, which is kind of cool because it has made me ask a lot of questions about my leadership style.

Shared understanding is so critical. When our whole team has shared understanding, everybody knows why they need to do what they’re being asked to do and they’re empowered to ask fewer questions and just go and do because they know the answers, because they understand the context, they understand the rationale. They understand when the things they’re asking to be done are in conflict with the rationale and can raise those issues and try to help people to work better. And moreover, I have found that there’s almost no stronger motivating force in management of people to have them understand why they need to do these things.

And the last aspect I’d say on shared understanding and why I think it’s so critical for leadership is that I’ve gotten the benefit of over these four startups watching my evolution in terms of transparency. And early on in my career, I, like so many entrepreneurs, had a list of things that I was just frightened of that truly kept me up at night. Things that felt like existential problems for my company and I felt like I had to keep those to myself. I felt like I had to keep those from my team and not speak of them too much, for fear of scaring off my team. And what that leads to is that you own the problems completely. You have no help. You live and breathe those everyday with no relief, and worse yet, you might be directing your team based upon that context and the team ends up having a completely different context and can’t understand why they’re being asked to do these wild and crazy things.

All of a sudden, the team’s ideas seem really out of touch with your ideas and because not everybody is drawing from the same perspective to help to drive progress. Fast-forward to Crew, where we’re on a shared [objectives and key results] OKR system for the entire company, where everybody has access to the different warehouses, where all board updates are shared with everybody in the company, where I truly don’t let those things that scare me, and like in any startup there are those things that do scare me, we share those and everybody knows what those things are and we all can work together to solve those problems. So for me, shared context, especially in a startup where you have so much change and that can be exhausting in some cases, shared context is just the ultimate hack to making it work better.

Are there any common traits you look for in leaders when you’re developing and building your teams?

First and foremost empathy. It’s a number one company value as well. What I have found is that you want leaders to be empathetic. You want them to be empathetic to your customer to really understand the unique situation of your customer. And in our case, we’re not building the app for ourselves and that empathy is really important. The empathy for the teams that you lead, empathy for the workers that are here, it’s such a shortcut in so many ways to being a more effective leader because you understand what’s going on and so I think that’s a really important quality. You can’t, of course, discount the need to have somebody who has a high intellect and is highly creative and a problem solver, and some of these things that you would, of course, be screening for in an interview, but empathy to me is just one of those ones that really if you have it, it’s a completely different experience as a leader than if you don’t.

Read more: Former Dollar General CEO Cal Turner, Jr. Shares Leadership Advice

The post Crew CEO Danny Leffel On Why Empathy And Shared Understanding Is Critical appeared first on

CEO Guidelines For Speaking Out On Controversial Issues

Chief Executive Magazine -

Former Papa John’s CEO, John Schnatter

Last year, John and Rose Marcario both followed the C-Suite zeitgeist and spoke out on hot-button issues from their CEO perches. Schnatter, then CEO of Louisville- based Papa John’s, told investors in December that the National Football League was mishandling player protests of the national anthem.

He blamed the league’s weakness for denting sales as its “official pizza sponsor.” At about the same time, Marcario, CEO of Patagonia, started leveling high-profile criticism at the Trump administration for downsizing two Utah national monuments, posting a withering message on the company website, “The President Stole Your Land,” and filing suit with an environmental coalition against the actions.

What happened next is as close to a controlled experiment in leadership as you can get, leading to two very different outcomes and plenty of lessons for those hoping to use their perch atop a company as a lectern.

Dynamics across the business and social landscape are prompting more CEOs to act like Marcario and Schnatter and create expanded roles for their companies and, often, themselves. Call it “Goodism.” More than ever, consumers, customers, employees, investors and other constituencies are expecting and even demanding a corporate embrace of values supposedly more sublime than merely making sales and profits, and CEOs are emerging as the logical spear carriers.

In recasting their brands and engaging vigorously in public dialogue, they are moving beyond mere market positioning and even comfortable “corporate social responsibility” accounting of environmental initiatives and donations to human services nonprofits.

Look at how quickly the CEOs of major gun-selling brands, including Ed Stack of Dick’s Sporting Goods and Doug McMillon of Walmart, pivoted onthe issue of increasing restrictions on gun sales in their stores in March after the mass shootings at the Parkland school in Florida galvanized public outcry about America’s approach to firearm regulation.

Dick’s and Walmart alienated a huge swath of their clientele—Second Amendment-dedicated gun owners— but they felt compelled to flip on this hugely divisive issue.

But as CEOs search feverishly for the right course, it’s worth keeping in mind that penalties for getting Goodism wrong can be extreme. In a survey conducted by our sister publication, Corporate Board Member, 26 percent of directors flat out opposed their CEOs taking public stances on controversial issues of the day, and 57 percent said the chief should consult the board before piping up.

In the case of Schnatter, customers fired back on social media that pizza quality was to blame, not the NFL. Papa John’s sank into tepid same-store sales comparisons. In the wake of the public disaster, Schnatter stepped down as CEO of the company he founded and is now chairman.

“When is it a bad idea to stand up for what you value?” – rose Marcario, CEO of patagonia

And to add insult to injury, given the chance to swap pies in February, the league took on Pizza Hut as its official pizza sponsor in place of Papa John’s.

Schnatter declined an interview request, but Papa John Chief Marketing Officer Brandon Rhoten told Chief Executive that his old boss “doesn’t love it when he has to talk about and explain his politics, because he feels that might make people uncomfortable.”

Schnatter, he says, believes that “when [Apple CEO] Tim Cook and [Amazon CEO] Jeff Bezos say something, and they don’t have the same political views as John, it’s not twisted and turned by most media sources.”

Over at Patagonia, the results were the complete inverse. Employees and customers cheered, sending letters of support to Congress for the company’s stand against the feds and expressing an outpouring of social media love for the nearly $1 billion, Ventura, California-based brand.

“When is it a bad idea to stand up for what you value?” Marcario says. “I think some companies, mostly public companies, are too afraid to express what they know is right because they are worried more about their major shareholders and delivering on earnings per share. [But] there is a responsibility now to have moral courage and speak out when something is wrong. If you’re not doing that, I’m not sure why you’re in the game.”

The post CEO Guidelines For Speaking Out On Controversial Issues appeared first on

Marvin Ellison: From Frying Pan To Fire—When To Make A Move As CEO

Chief Executive Magazine -

The surprise news of Marvin Ellison’s move from the helm of troubled mass merchant JC Penney to the nation’s number two home improvement retailer Lowe’s is a move which is more common than many may think. CEOs echo the 1982 smash hit song by Clash called “Should l Stay or Should I Go?”

Ellison is a highly qualified, popular, experienced retailer and one of only three black CEOs of Fortune 500 companies. Why did he take this opportunity? Here are five considerations for CEO candidates:

Mission Accomplished?  JC Penney just reported disappointing results 2018 Q1, consistently missing forecasts citing bad weather and facing intensified competition from stronger players such as Walmart and Target, following a 60% drop in 2001 stock price with pronouncements of strategic reversals.

Predecessor Mike Ullman returned to office for two years after a devastating 17-month tour of duty by his immediate successor, Ron Johnson, who had been promoted by activist investor Bill Ackman. Johnson shattered the culture with massive layoffs and drove away the core customer base with high fashion merchandise in a failed attempt at transformation. Ullman, who had built the soaring Sephora division delivering of the most profitable earnings in JCP’s history, returned for two years to stabilize JC Penney from its tailspin before he handed the keys to Ellison.

Ellison’s mission of focusing on branded store departments, omnichannel retailing and consolidating operations is far from complete. In a recent Equilar study, the median tenure for CEOs at large-cap (S&P 500) companies was 5.0 years by the end of 2017. Ellison leaves JC Penney with a mixed reputation—and weaker than when he arrived four years earlier.

“While JC Penney has a sensible board, many would argue that the Lowe’s board is stronger.”

Frying Pan to Fire? Perennially in the shadows of rival Home Depot, Ellison accepted the Lowe’s position on the eve of an expected healthy growth in revenues and earnings Q1 report that is still dampened by the poor spring weather for home building and remodeling. He follows a predecessor who was in office for 13 years. With the coming summer months of great weather after Memorial Day, this could have been great timing for benchmarking expectations.

Board Trade up? While JC Penney has a sensible board, many would argue that the Lowe’s board is stronger, while a bit too large at 12 (versus 9 at JC Penney), but with most of the board experienced in major retail and consumer products enterprises. It is revealing that the JC Penney board had no ready succession plan for the upheaval. Further, Lowe’s board has the responsible activist David Batchelder, formerly of Relational Investors, who worked closely with former Home Depot CEO Frank Blake, current CEO Craig Menear and Ellison in a hugely successful revival of Home Depot. He and Ellison share great appreciation off their respective styles and values, as well as terrific industry knowledge and a bond of trust.

Loyalty to a Past Employer? Retailers regularly have hopped across firms. In fact, Alan Questrom, a former JC Penney CEO, also led Macy’s, Nordstrom and Barney’s. While Ellison knows the secret sauce of Home Depot, it is not a static recipe.

A Chance of a Lifetime? Eric Schmidt left the foundering local network software company Novell destined for failure after gaining great star power as CTO of Sun Microsystems. Returning to the frontiers of technology and innovation, Schmidt brilliantly led Google for 17 years of unprecedented growth with no mention ever of his Novell setback. Ellison knows Lowe’s business better than any possible candidate and it represents the perfect deus ex machina – the ancient plot device of sudden chariots from sky to save mythic Greek heroes trapped in certain.

The post Marvin Ellison: From Frying Pan To Fire—When To Make A Move As CEO appeared first on

Why New CEOs Need To Manage Change To Succeed

Chief Executive Magazine -

The first emotion leaders experience when they accept their first CEO role is excitement.

The second emotion they experience is fear of failure.

Those reactions are both entirely understandable. CEO’s have all of the responsibility for results, but not all of the control to make them happen. That responsibility to control ratio is inherently uncomfortable. Much fear in life is unwarranted, but in this instance, the fear of failure is not.

In fact, it’s all too realistic: 50% of first time CEOs will fail to be successful in role.

But why?

Most of the time, failure in-role is due to a failure to manage change. Here are two ways that failure happens – and advice on how to protect against it.

1. Failure to Adjust Leadership Style to a New Context

Most leaders have the view that their leadership style is fairly fixed.  This assumes that the way they lead is inherent to them – their views, their personality, their strengths, and the things that have worked for them in the past.

Unfortunately, that belief is a recipe for disaster in a new role, because a new role is often vastly different from old contexts.

Strong leaders know that their leadership style must be situational – that they must lead in a way that meets the needs of the organization and its people in order to expedite business results.

“A leader who wants to keep the top team in place without considering context may be risking too much.”

A CEO can inherit a range of organizational challenges. He might be tasked with a complete turn-round.  Or, she might inherit an organization that simply needs to be continuously improved or made more innovative. These two scenarios require very different leadership styles.

While a turnaround might require a heavy handed, highly decisive leadership approach for some time, a continuous improvement assignment likely requires a leader who can encourage and reward innovation with a more enabling approach to leadership. A leader who mistakenly assumes the helm and pushes for sweeping change before winning over the hearts and minds of the people may create unnecessary noise.

The quantity and pace of change required should be the key driver of the style needed – not personal preference.

2. Failure to Assess the Leadership Team

Failure to assess the leadership team is also a risk. A leader who wants to keep the top team in place without considering context may be risking too much. Similarly, a CEO who comes in and moves most of the seated team out and brings in his or her “own people” may risk alienating leaders the next several layers down.

To avoid failure, don’t come in with a preconception. Instead, assess the talent on the team and gauge the morale to make strategic decisions from there.

  • If the team is talented but has low morale, a good CEO will take time to build morale before raising or drastically changing expectations.
  • If the team has high morale but is weak on talent, the CEO can develop the talent (if the charter allows time for that) or strategically upgrade talent where it is most needed.
  • If the CEO finds the team is low on talent and low on morale, they are best served to move out much of the talent and import fresh, highly skilled talent.
  • If (by a stroke of good luck) the CEO finds the talent highly skilled and with high morale, the team will likely be ready for a challenge, and may be ready to embrace significant changes in charter and expectations.

They key is to do a thoughtful assessment of your talent and make changes that are strategic, not reactionary.

To Succeed, Assess and Adapt

Too often CEOs lead in the way that served them in their last roles. The likelihood that this style is precisely right in a different organization with a different team and a different charter is low.

As always, a thoughtful assessment of the charter, the team, and the broader organization will guide the CEO to the style that is required to take the organization from where it is to where it needs to be.

If new CEOs take the time to strategically assess and adapt within the new context, the chances of failure in a new role dramatically decline.

The post Why New CEOs Need To Manage Change To Succeed appeared first on

New Supply Chain Cybersecurity Threats Emerge

Chief Executive Magazine -

Authorities are concerned the software on the phones of Chinese manufacturers, ZTE and Huawei, may have been modified for intelligence gathering.

For reasons of speed and efficiency, the U.S. government transacts electronically with important suppliers of goods and services, giving them access to specific systems to exchange routine business information. Aware of this vulnerable entry point, hackers representing nation states like China and Russia regularly attack these suppliers to infiltrate government systems.

This is old news. A novel means to penetrate the country’s cyber defenses has surfaced — Chinese-made mobile phones. The Federal Bureau of Investigation, Central Intelligence Agency, and National Security Agency have warned American consumers not to use smartphones made by ZTE and Huawei, two Chinese smartphone manufacturers. The phones’ software may have been modified for intelligence gathering.

The country’s leading national security organizations are concerned that millions of Americans could use these smartphones to buy products from a company that also sells to the government. Assuming the device is embedded with malware, the consumer may inadvertently open a back door into the supplier’s systems, the malware worming its way to the system providing access to the government. So far this year, two such supply chain attacks allegedly perpetrated by Chinese hackers have occurred, according to Crowdstrike’s 2018 Threat Report.

Attack Surface Widens

It’s not just the U.S. government susceptible to this innovative cyber attack scenario. All businesses that rely upon external suppliers to provide finished goods and services to their customers are at risk of the same outcome; hence the alarm that greeted President Trump’s recent pledge to “rescue” ZTE by ending a seven-year import ban. U.S. companies annually supply ZTE with almost $3 billion of components.

President Trump tweeted on May 13: “President Xi of China, and I, are working together to give massive Chinese phone company, ZTE, a way to get back into business, fast. Too many jobs in China lost. Commerce Department has been instructed to get it done!”

Not too fast, cybersecurity experts warn. “A growing set of threat actors are now capable of using cyber operations to remotely access traditional intelligence targets, as well as a broader set of US targets including critical infrastructure and supply chains,” William Evanina, who leads the National Counterintelligence Security Center, told the Senate Committee on Intelligence on May 15.

In this dangerous environment, CEOs must ensure their companies’ suppliers’ cyber defenses are fortified. This responsibility is now mandated in the European Union, following the May 25 implementation of the European Commission’s General Data Protection Regulation (GDPR). Prior to processing a consumer’s personal information, businesses must analyze the related data privacy and security risks of sharing this information with suppliers, vendors and outsourcing partners.

“With regard to post-breach actions, the best advice is to retain a third-party cyber security firm to conduct a rapid forensic investigation that identifies the breadth and scope of the breach and all affected parties.”

Cyber attacks against these third parties have resulted in a litany of data breaches, among them the 2013 data breach of retail store chain Target caused by the hacking of a vendor HVAC contractor. According to the National Institute of Standards and Technology (NIST), major cyber supply chain risks are caused by:

  • Inferior information security practiced by lower-tier suppliers.
  • Third-party service providers and vendors that have virtual access to information systems.
  • Compromised hardware and software (the concern with Chinese-made smartphones).
  • Software vulnerabilities in supply chain management systems.

NIST, a physical sciences laboratory within the US Department of Commerce, advises companies to beware these threats, but concedes the impossibility of completely eliminating the risk of a data breach. “The question becomes not just how to prevent a breach, but how to mitigate an attacker’s ability to exploit the information they have accessed and how to recover from the breach,” NIST stated.

Best Practices Advised

There are ways to limit the risk of a supply chain breach. SANS Institute, a provider of cybersecurity training and related certification, recommends that businesses define their mission-critical vendors — the companies where a successful breach may have a significant impact on operations, adversely affecting revenues, and client information.

The next step is to identify a primary contact at each supplier or vendor to serve as a liaison. This outside person is entrusted to oversee the supplier’s comprehensive cyber risk management program and provide periodic reports to the partnering business.

The Institute also advises that companies establish a Supplier/Vendor Risk Management Program identifying appropriate data access controls for these entities. It further recommends that companies retain the right to audit and test the cyber security controls of vendors, suppliers and other service providers.

NIST offered other best practices, such as the inclusion of the company’s cyber security practices in every RFP and contract with vendors and suppliers, and permission to go on-site at a supplier or vendor to review the organization’s cyber security practices and address perceived vulnerabilities.

With regard to post-breach actions, the best advice is to retain a third-party cyber security firm to conduct a rapid forensic investigation that identifies the breadth and scope of the breach and all affected parties. This firm can then work with IT security professionals within the business and the supplier or vendor liaisons to quickly remedy the situation.

Read more: Understanding The Seven Types Of Data Breach

The post New Supply Chain Cybersecurity Threats Emerge appeared first on

Former Dollar General CEO Cal Turner, Jr. Shares Leadership Advice

Chief Executive Magazine -

Cal Turner, Jr.’s values-based, people-oriented, and pragmatic leadership style helped take his family business, Dollar General, to the next level. He took over as president of the three-generation-run family business in 1977 and served as chairman and CEO until he retired in 2003.

In his new book out today, “My Father’s Business: The Small-Town Values That Built Dollar General into a Billion-Dollar Company” (Hachette/Center Street), Turner chronicles stories of three generations Dollar General’s leadership, including how his grandfather turned a third-grade education into a recipe for success, and how his driven father created the game-changing and wildly successful dollar price point strategy.

“I consider myself the benefactor of great mentoring and this book is my attempt to mentor the reader,” Turner told Chief Executive. Turner talked about that mentoring, how his leadership style evolved over the years and why listening is such an important skill for a CEO. Here’s what he had to say:

Q: What were some of the most important lessons that you learned from your grandfather and your father that prepared you to be a successful CEO at Dollar General?

A: My grandfather, who only had a 3rd grade education, had two guiding principles. Number one was everybody he met would be smarter than he. He should therefore learn something from everybody. He cast himself to learn something from everybody he met and he believed in saving something from each paycheck. So, it didn’t matter so much as the regularity of saving something. I learned that from him. From my father, I learned to pay attention to the customer and that’s pretty strong guiding principle for any CEO. And my father had, of course, the second concern for the company family, the employees.

Business to him was a family enterprise. He began helping his father after my father’s education exceeded the 3rd grade. So, he was very early into the business and do not have a separate business from family. And it helped me to really understand the job of CEO. So, they jointly founded the company, and I would say that was at the heart of each.

“A good CEO, in my opinion, gives his or her job to the whole organization and brings them into the CEO agenda.”

Q: Tell me a little about some of the opportunities and some of the challenges that are tied into taking over the family business. Was there anything that popped up that you didn’t expect once you were actually running the company?

A: Well, perhaps only every day. I am fortunate to have had what I considered to be early CEO training, from my mother. This is my father’s business, but the upbringing that I received in preparation for the business also involved my mother: not to take myself too seriously, to reach out to other people. “You speak first. You engage them first. And by the way, son, for a good boy, you get into a lot of trouble,” which was her way of saying to me, “We want to deal with the problem by taking the person out of the problem.” We could talk about that when we separated the person from the problem, and I applied that principle to my leadership attempt as CEO.

I knew that I was stepping into the role of boss’ son and that I should recognize that with everyone, and laugh at that enough so that everyone would help me to figure out how to be a better CEO, help the boss’ son to figure out how to be a better CEO.

A good CEO, in my opinion, gives his or her job to the whole organization and brings them into the CEO agenda.

Q: How did your leadership style evolve as you led the company through the decades?

A: Well, I had to negotiate with the founder of the company, my father, as to the leadership style that would work in the company. When I first came into the business with him, he said, “Well, son, I think you have to run a business like a church.” And I said, “Oh, no. If we do that, we’re dead. I know that’s not right, daddy.” And then as he saw my attempt to engage with the employees, at one time he said to me, “Son, you’re consulting others too much. It’s not efficient. You know what you want them to do. Tell them what to do and get on with running the business.” Well, we had already grown to a size beyond this leadership style he advocated to be effective.

It was time for the company to undertake strategic planning and there’s a whole story around how I explained to him what it was. And he supported me. He would only have supported his son in the undertaking of strategic planning, but he did that for his son. So, I was positioned to be a CEO and I had the support of the founder who didn’t understand what it meant to be a CEO. And he expected me to learn and do it well. And he was my cheerleader, though he sometimes didn’t understand what I was attempting to do as CEO.

Q: What’s your advice for business leaders who are looking to improve their leadership style?

A: I think you need, as CEO of any organization, to finely hone your ability to listen. And when a CEO has the reputation of being a good listener, anyone who speaks with the CEO wants to think through issues and have something worthwhile to say because, “My golly, that person’s gonna listen.”

And it’s often how you ask questions that helps you to have that reputation of being a good listener. I was once criticized by a new vice president of our company who said, “the way you ask questions encourages them to tell you what’s wrong.” My response was, “Well, tell me how you ask questions?” You don’t want to ask questions that elicit the answer of how wonderful the company is. So, there’s a talent in how you undertake listening to people and they’ll try to give you an answer that’s worth your while in the companies. I think that’s critical. The highest talent of leadership is that communication talent that’s based on solid listening.

The boss needs the reputation of seeking the actionable truth, not what you think the boss should want to hear. It’s not about making the boss feel good. It’s about helping the company to be better.

The post Former Dollar General CEO Cal Turner, Jr. Shares Leadership Advice appeared first on

Steve Easterbrook Helping To Make A ‘Better McDonald’s’

Chief Executive Magazine -

“It’s not about being a different McDonald’s,” says president & CEO Steve Easterbrook. “It’s about being a better McDonald’s.”

That about sums about the goal for the iconic fast-food chain’s “Turnaround Plan” that Easterbrook unveiled in 2015 when he took the top post.

Tackling head on six consecutive quarters of declining same-store sales, the new CEO at the time made a 23-minute video emphasizing that his team was planning to make some real tweaks to reinvigorate the nearly six decade-old company. Plans included restructuring corporate operations, simplifying the menu and upgrading the quality of the food, and adding new technologies for customer service, such as digital menu boards, self-order kiosks and mobile apps.

“I will not shy away from the urgent need to reset this business,” he said. “We will look to create more excitement around the brand.”

Flash-forward three years, and Easterbrook “is having the last laugh,” says QSR Magazine, as McDonald’s sales have since rebounded – and so has its stock price.

“There’s an undeniable excitement surrounding McDonald’s as it invests in new technology initiatives, customer experiences, and corporate responsibility,” the publication writes.

For the first quarter, the fast-food chain with 37,000 restaurants in more than 100 countries marked its 11th consecutive quarter of positive comparable sales, with growth of 5.5%. Revenue rose 9%, to $5.14 billion, and net income rose 13%, to $1.38 billion, or $1.72 earnings per share.

“I’m pleased with our first quarter business performance as we continue to build momentum and grow customer visits with delicious food, compelling value and enhanced convenience,” Easterbrook said in the earnings call with analysts. “We are managing our business for the long-term and with our velocity growth plan, I am confident that our strategy and actions we’re taking will position the business for sustained growth.”

McDonald’s is increasing its capital improvement budget this year to $2.4 billion, up from $2 billion in 2017, to not only modernize its stores, but also lay the groundwork for a bigger push into home delivery, which the company sees as a huge potential growth driver over the next decade.

The massive changes are being conducted at a breakneck pace, Easterbrook said.

“We’re asking a lot of everybody in the McDonald’s system,” he said. But “this is what it takes to keep pace with today’s rising customer expectations.”
Since joining McDonald’s in 1993 as a financial reporting manager in London, Easterbrook has held numerous leadership roles. He served as global chief brand officer, president of McDonald’s Europe and CEO of McDonald’s UK.

Having spent time as a McDonald’s restaurant manager, he also understands how to develop company strategy that crew members and managers can execute successfully in restaurants. In addition to his more than 20 years with McDonald’s, Easterbrook briefly led two UK-based restaurant chains, PizzaExpress Limited and wagamama limited, giving him a broader industry perspective.

He’s No. 112 on Chief Executive and RHR International’s CEO1000 Tracker, a ranking of the top 1,000 public/private companies.

Steve Easterbrook, President & CEO, McDonald’s.

Headquarters: Chicago, IL

Age: 51

Education: Durham University (U.K.)

First joined company: 1993

Previous positions with company: Chief brand officer, President of McDonald’s Europe and CEO of McDonald’s U.K.

Named CEO: 2015

The post Steve Easterbrook Helping To Make A ‘Better McDonald’s’ appeared first on

CEO Confidence Rebounds in May, But Labor Is a Growing Concern

Chief Executive Magazine -

Automotive CEOs meet President Trump at the White House. U.S. CEOs’ outlook for business conditions 12 months from now rebounded in May after three months of decline,

U.S. CEOs’ outlook for business conditions 12 months from now rebounded in May after three months of decline, making the first five months of 2018 the strongest on record since 2004.

Chief Executive’s most recent CEO Confidence Index indeed shows overall sentiment among the country’s business leaders remains “very good,” registering 7.29 out of 10, up from 7.16 in April, although still shy of its 7.62 high in January.

Once again, the majority of the 289 CEOs who participated in our survey said overall economic conditions—including inflation and interest rates—are fueling their optimism, alongside strong consumer demand.

“The tax cuts and removal of regulations have sent a wave of optimism throughout consumers and business,” said the CEO and president of a mid-market industrial manufacturing company who said his company is reporting profits for the first time in 16 years. He expects profits to be up more than 20% over the coming year.

Worries over trade wars and geopolitical discord also seem to be fading, although the Index suffered a slight drop after last week’s announcement that the US-North Korea summit could be cancelled.

Some CEOs said they are choosing to err on the side of caution in their optimism and strategic planning, pointing at the state of unpredictability in government and on the global scene. Others told us they fear the short-term gains that are driving the current state of euphoria will lead to long-term problems that will negatively impact the U.S. economy.

The CEO of a mid-sized professional services firm told us his main concerns are “the very high probability of a trade war with Europe and Asia, [the U.S.] leaving NAFTA, and the very good chance that there will be a conflict in the Middle East.” He says CEOs should not ignore the economic impact of these events on their strategic plan and on the country as a whole.

Nevertheless, high levels of confidence on the part of businesses typically translate to an outpour of investments and increased capital expenditures, which is what the vast majority of CEOs told us they intend to continue doing for the next 12 months.

Overall, 83% of respondents forecasted revenue growth and and 76% predicted profit growth in the months ahead. Two-thirds anticipate they’ll increase capital expenditures. Month over month, these numbers have been holding relatively steady, except for a notable upswing in February when the Tax Cuts and Jobs Act was officially implemented.

The one area of real concern for CEOs is labor. “The market still appears strong,” commented the CEO of an upper-mid market wholesale/distribution company. “But it is hard to find employees, and the cost of living is outpacing the ability to pay more.”

Labor availability is indeed driving up costs, and few industries have the ability to pass those increases onto the consumer. A shortage of qualified talent also means potential hires are asking for higher pay, which would explain why fewer CEOs are considering adding to their workforce in 2018. Of note, 10% now say they plan to decrease their number of employees, a number we hadn’t encountered since last November and a trend we will continue monitoring over the coming months.

Changing tides

Looking at specific industries, construction continues its upward streak, adding more than half a point to register at 8.22 out of ten this month. It is now up 12% year over year.

Financial services and consumer goods manufacturing each reported significant setbacks last month, but they appear to now be steadying. Both are up from the same time last year.

After a steep decline in March and April, IT/Telecomm recovered almost all of its losses in May. “Our industry is going through a technology shift,” explained the CEO of a mid-sized provider of business communications systems and services. “Small businesses in general are doing well in this economy.” While some of the sector’s chief executives reported feeling optimistic about the lessening of regulations, others say there is still a very long way to go before the climate is truly business-friendly.

Professional services firms also enjoyed an increase in confidence. “The drivers for our business are M&A activity, C-level turnover, and funding of leadership development, all of which are strong,” commented the managing partner of a small company in Illinois.

Much like in the IT sector, CEOs of professional services firms are looking forward to more deregulation. “There’s a high degree of optimism that the restrictive regulatory issues will continue to be addressed and that the tax cuts will foster continued business investments,” said the CEO and president of another Illinois corporation.

Across almost every industry we are seeing an uptick in from last year’s confidence levels, with the exception of wholesale/distribution, where CEOs tell us that despite positive fundamentals and lower taxes, there are concerns over the instability in both the future of the U.S. economy and Washington politics.

By size, in terms of annual revenues, all categories are up month over month, but small and large companies continue to be the most positive in their outlook, finishing the month up 7% and 6% respectively from the same time last year.

Large company CEOs attributed their confidence to their ability to pay for talent and rising wages, while their smallest counterparts say they feel optimistic due to an increase in consumer activity and easier access to capital.

About the CEO Confidence Index

The CEO Confidence Index is America’s largest monthly survey of chief executives. Each month, Chief Executive surveys CEOs across corporate America, at organizations of all types and sizes, to compile our CEO Confidence Index data.

The post CEO Confidence Rebounds in May, But Labor Is a Growing Concern appeared first on

CEOs to Honor Best Companies With Veteran & Military Initiatives With Inaugural Patriots In Business Award

Chief Executive Magazine -

WEST POINT, NY, May 21, 2018Chief Executive magazine and Thayer Leader Development Group at West Point today announced the inaugural Patriots in Business Award, honoring the Best Companies with Veteran & Military Initiatives.

This award will recognize outstanding businesses that lead our nation in supporting active duty military members, veterans and their families and exemplify the values of Duty, Honor and Country through their business practices and throughout their community and industry. Through their initiatives on hiring, training, supporting, and honoring Active Duty, Veterans and military families, these outstanding companies are the gold standard for other companies who seek to support those who serve.

“There is no other award like this,” said Dan Rice, President, Thayer Leader Development Group at West Point, and a 1988 graduate of the United States Military Academy at West Point. “It will recognize the overall support of active military, veterans and their families, and we hope it will make a difference in recognizing, educating and inspiring support of veterans and our military.”

“With the Patriots in Business Award, we’re hoping to showcase the extraordinary ways American companies of all sizes have been working with the nation’s soldiers, sailors, airmen and Marines, as well as their families,” said Marshall Cooper, CEO, Chief Executive Group. “Yes, it’s good public service. But it’s also, especially in the current tight talent market, a real strategic advantage for smart companies. We want to highlight that.”

Awards will be judged by a cross-industry panel of peer-CEOs and former military leaders, and presented in three categories: Large enterprises (greater than $1B annual revenue), medium-sized businesses ($10M-$1B annual revenue) and small businesses (less than $10M annual revenue).

The awards are open to all for-profit corporations. Winners will show demonstrated, best-in-class leadership practices in hiring veterans and military spouses; training, retaining and supporting veterans, National Guard, reservists and their spouses; and honoring veterans and their spouses within the company and the community. There is no fee to enter.

The winning company CEOs will be honored on October 2, 2018 at the 2018 CEO Talent Summit, co-hosted by Chief Executive and Thayer Leader Development Group at West Point, NY.

For more information and to submit a nomination:

The post CEOs to Honor Best Companies With Veteran & Military Initiatives With Inaugural Patriots In Business Award appeared first on

The Industries That Overly Rely On Performance Metrics

Chief Executive Magazine -

“The Tyranny of Metrics” by Jerry Z Muller

More from Jerry Z. Muller, author of the “The Tyranny of Metrics” as well as a professor of history at the Catholic University of America in Washington, D.C., on why fixating on metrics is misguided.

Part one of the interview is here.

Are there industries that this affects more than others? Are there ones that this [metric fixation] impacts a lot?

It’s hard to make generalizations. I think it’s perhaps more dominant in finance because there’s a propensity of people in finance to measure their own achievements in narrowly monetary forms. But I think it’s pervasive in a wide range of publicly-traded corporations , as well as many other sectors from police to the military to education, and very much medicine, which is a huge sector of our economy and is deeply burdened by the problems of metric fixation. It’s also increasingly becoming an issue in philanthropy, where under the influence of this kind of metric fixation and managerial ideology, philanthropies are demanding more and more standardized measurement from there grantees in a way that imposes additional administrative costs upon the grantees and is often counterproductive as well.

What are some strategies you’d recommend that would be more productive than simply measuring on data? How could data be used more wisely?

Jerry: One of the most important ways is to distinguish measurement used for diagnosis and analysis by the practitioners themselves, from metrics that are connected to reward and punishment. It’s highly useful often to have measures that are used for diagnosis by the people actually engaged in the work itself or by their superiors. That’s different from measures that are connected to reward and punishment. When you have reward and punishment, then you have all kinds of incentives for gaming the metrics, or focusing too narrowly upon them, at the expense of what is not measured. So, that’s the first thing I would emphasize: is it’s not just a question of measurement or no measurement, it’s how the measurement is used.

“The people who you’re managing are not dogs or animals who respond in a kind of Pavlovian way to material incentives.”

And then there’s the question of who develops and evaluates the metrics. If the people who are being judged ultimately have a role in the development and the analysis of those metrics, that often makes them more effective. And thirdly, metrics are often useful as a tool because they do provide a certain measure of objectivity. And in that sense they can help to combat bias in bosses. But there’s a difference between using standardized performance metrics as a tool in which there’s also a role for judgment on the part of those using the metrics, versus using those metrics as a decisive factor.

[Also] when you’re looking at the measurements, it’s important to remind yourself of all the things that are not being measured, perhaps because they can’t be measured, and remind yourself that they may be at least as important or perhaps more important as the things that are being measured.

What were some of the big overall lessons that CEOs can take away from your book?

Jerry: Most management books, I would sa, 99 percent of them, are written from the perspective of managers, and they lose sight of the perspective of the managed. And that’s I think one of the unusual things about my book and one of the things that makes it so valuable. Because when you’re dealing with human beings — unlike when you’re dealing with molecules in chemistry or biology — the human beings have consciousness, and they take into account and react upon what’s being measured and incentivized. So, it’s important to try to understand these things from the likely effect that they will have on the managed and to take that into account when you’re creating your management systems.

To put it another way:  The people who you’re managing are not dogs or animals who respond in a kind of Pavlovian way to material incentives. They’re a lot more complicated than that.

The post The Industries That Overly Rely On Performance Metrics appeared first on

Is Your Growing Company Headed Toward One of These Pitfalls?

Chief Executive Magazine -

Avoid common pitfalls when growing and expanding a company

Angel investors. Rounds of funding. Initial public offerings (IPOs). It’s what entrepreneur dreams are made of, but while rapid growth yields plenty of excitement, the growing process is not without its challenges. In fact, according to a study by the Kauffman Foundation and Inc., about two-thirds of the fastest-growing companies end up failing.

CEOs can’t get caught up in the exhilaration of growth or the piles of legal and financial legwork that need to be done and overlook what’s happening within their own four walls. These are common pitfalls executives should look out for when growing and expanding a company, along with ways to handle them.

Turn Back: Silos Unsafe to Enter

Pitfall: Organizations are typically broken down by departments and functionalities, a structure that lends itself to some natural segmentation. And many times, as companies continue to grow, the gaps between departments get wider and wider until organizational silos form. When employees operate in silos, they tend to be more loyal to their group than to the company or employer. They’re distrustful and resistant to change. They keep information held tight within their group and make decisions without considering other departments. If left unaddressed, silos are capable of completely destroying efficiency, collaboration, communication, and positive morale across an entire company.

Solution: So your company is growing, and you want to avoid the aforementioned problem. What can you do? First and foremost, make sure all employees are aware of leadership’s goals and vision as the company continues to scale. They shouldn’t just understand your objectives—they should buy in to your objectives. Hold regular all-hands meetings, and frequently discuss the status and future of the company. Make sure department managers thoroughly understand short-and long-term goals and key initiatives. Encourage cross-functional collaboration by pairing different managers together on certain projects.

Warning: “Chain of Command” May Break Under Pressure

Pitfall: Elon Musk recently revealed a list of productivity tips to his employees, one of which encouraged them to speak directly to the person in charge of a task or department. “If, in order to get something done between depts, an individual contributor has to talk to their manager, who talks to a director, who talks to a VP, who talks to another VP, who talks to a director, who talks to a manager, who talks to someone doing the actual work, then super dumb things will happen,” Musk wrote. As companies grow, this chain of command can easily develop. As more members of management and middle management get added to teams, employees become further separated from the person they perceive to be the “decision maker,” which requires them to jump through more hoops of approval in order to get things done.

“As more members of management and middle management get added to teams, employees become further separated from the person they perceive to be the ‘decision maker’.”

Solution: Not only is the process of running things “up the flagpole” extremely inefficient; it’s demoralizing to employees who no longer feel like they have any autonomy or decision-making power. If you suspect this is a problem in your growing organization, gather your managers together, and let them know that their priority should be developing talent rather than approving every decision that leaves their departments. In performance reviews, grade managers on how well they develop the careers of those who report to them. Make sure employees always have a clear view of who is responsible for what, using tools like a live org. chart, and encourage them to handle conversations directly, rather than going through a chain of command.

Caution: Approach Fresh Talent Carefully

Pitfall: Another problem that plagues rapidly growing organizations is creating an imbalance of people who are new to the company versus those who have historical knowledge and context about the company. As you continue to grow and scale, you’ll naturally add new employees to the ranks. However, if you’re not careful, you can accidentally end up with a pocket of the organization that is entirely staffed by new hires. Due to the lack of tribal knowledge in this fresh group, there is little to no understanding of where the company came from, how departments work together, undocumented intricacies of the company’s product and processes, and where the company is heading and why. Instead, this group starts to operate in its own way, which can often clash with the existing culture and mindset of the company.

Solution: The solution here is simple. When designing your hiring plans, pay attention to tenure on your org. chart. If you need to form a new team, it is often best to split an existing team and add a few new people to both, as opposed to adding a team entirely comprised of new hires. Reward the people who have been with you for a while and have historically performed well by promoting new managers from within. And since hiring new talent is inevitable as you grow, make sure HR arms new hires with the tools they need during the onboarding process. New hires should understand your culture, objectives, and organizational structure from day one.

As your company expands, growing pains are inevitable, but it’s important to recognize when you’re headed in the wrong direction and course-correct before you find yourself facing a pitfall that can severely impact employees and your company as a whole. All of the problems described above can be avoided with simple and constant communication, transparency, and employee engagement.

Read more: 4 Things to Get Right in Fast Growth Markets

The post Is Your Growing Company Headed Toward One of These Pitfalls? appeared first on

Fixating On Performance Metrics Can Hurt Your Company

Chief Executive Magazine -

The Tyranny of Metrics by Jerry Z. Muller

Jerry Z. Muller’s interest in history is what got him to study society’s obsession with performance metrics.

“I’ve long been interested in the history of capitalism and the history of organizational life under capitalism…” says Muller, author of the “The Tyranny of Metrics” as well as a professor of history at the Catholic University of America in Washington, D.C. “And I came up with the idea for the book partly by observing what seemed to be dysfunctional patterns going on in public policy over policies like No Child Left Behind that place a lot of emphasis on standardized measures of performance, and then rewarding and punishing institutions accordingly.”

Muller, who has authored other books such as “The Mind and the Market: Capitalism in Modern European Thought,” and “Adam Smith in His Time and Ours (Princeton),” says he’s had a lot of experience in his own life, in academia, where he says he realized how standardized performance indicators were “time-consuming and sometimes useless, sometimes dysfunctional.”

The Tyranny of Metrics” covers the pressure — across business, education, government, medicine, and other facets of life — to measure based on performance metrics. Chief Executive talked with Muller metric fixation, how CEOs tend to lose sight of the bigger picture, and much more.

Below are excerpts from part one of that interview.

Why do executives, leaders, and CEOs fall victim to metrics fixation. What has led to this phenomenon?

It’s a combination of beliefs that seem plausible and even scientific, and objective when you first hear them, but are often counterproductive when they’re actually put into effect. From the point of view of corporations, it involves the idea that human judgment is unreliable and that you can replace human judgment with standardized measures of performance, all of which sounds very scientific and objective.

So the notion is that you can really minimize the role of judgment and maximize the role of what seems like scientific measurement. And that’s connected to the idea of pay and punishment for performance. So the idea is that if you fulfill or exceed these metric targets, this should directly lead to increases in your pay or if you fail to meet them, it should lead to one or another form of punishment.

So, for example…you might recall that the CEO of Mylan was to be remunerated if she met very high targets for the growth and profitability. [This obsession] led to the whole EpiPen scandal in terms of radically raising the price of a necessary pharmaceutical product which helped lead to the decline in the reputation of the firm. Or in the case of punishment, there’s the case of Wells Fargo that told its frontline employees that they had to cross-sell various products or else they would be punished in one way or another including losing their jobs. This ended with all sorts of forms of corruption in terms of them opening up bank accounts and credit cards for customers, and the customers haven’t requested in such a way that gamed the metrics. They increased the metrics of performance but in a way that was inimical to the ultimate purposes of the organization.

“Metrics do have propensity to make one lost sight of the bigger picture. They have a propensity to be too narrow, both in the case of metrics for individual performance and for those of the whole division of a firm or even the firm as a whole.”

The metric fixation is this combination of emphasis on standardized measures of performance, the minimization of judgment, and tying pay or punishment more or less directly to those metric targets. It’s a variation of the pattern of management by objectives. And often for a variety of reasons that I deal with in the book, this turns out to be counterproductive.

It seems like in a lot of these cases, these guys almost just lose sight of the bigger picture, and zero in on those metrics that they forget kind of the larger impact of what could happen. What are some of the damaging effects of losing sight like this?

Jerry: Metrics do have propensity to make one lost sight of the bigger picture. They have a propensity to be too narrow, both in the case of metrics for individual performance and for those of the whole division of a firm or even the firm as a whole. Because there are some jobs in the world that do really have a single limited purpose. That’s sometimes the case in sales jobs. It’s the case when you have some standardized job like replacing windshields on a car or something like that. In those cases, pay for a measure of performance can work when the job is narrowly structured to a single purpose.

But in most organizations people have multiple purposes in their jobs and there are multiple goals they ought to be trying to fulfill. And if you just measure one or two of them, then a couple of things can happen. Either people will actually just to do the thing that you measure and reward at the expense of other important elements of their jobs that are not getting measured and rewarded. In those cases, you have actually a narrowing of people focus in order to focus on the metric targets for which they’re being rewarded or punished. Alternatively, people may feel a sense of frustration knowing that they’re being measured and rewarded for only part of what they actually are doing or need to be doing. And that can lead to demoralization of employees.

And then of course, there’s the problem on the executive level, especially on the CEO level of the propensity of narrow metrics like quarterly profits to lead to short-termism. If you tie CEO remunerations very closely to stock prices and if stock prices, in turn, move in good part based on the relationship between what the firm projected in its last quarterly projections versus what its actual quarterly bottom line shows, then you have a propensity to short-termism to trying to meet those metrics or surpass those metrics at the expense of the longer term interests of the firm and things like investing in capital equipment or investing in human capital or investing in R&D. In all of those ways, metrics fixation can have a very negative effect on the actual firms.

Stay tuned for more in part 2

Read more: Paying Top Dollar Doesn’t Mean You Have Top Talent

The post Fixating On Performance Metrics Can Hurt Your Company appeared first on

Understanding The Seven Types Of A Data Breach

Chief Executive Magazine -

Ignorance is not bliss when it comes to data breaches and just knowing about them is not enough.

Data is today’s commercial currency.  So, it stands to reason that criminals today will use every means necessary to breach your security in order to access your data.  In order for your organization to be protected from a data breach, you will need a comprehensive understanding of the types of data breaches or attack vectors available to cyber criminals.

Defined simply, according to Wikipedia, a data breach is “the intentional or unintentional release of secure or private/confidential information to an untrusted environment.” The Identity Theft Resource Center tracks seven types of data breach categories:

  1. Hacking/Computer Intrusion (includes Phishing, Ransomware/Malware and Skimming): Cyber criminals are getting smarter every day and are constantly using a variety of techniques both new (zero-day) as well as variations on old exploits.
  2. Insider Threat: Your employees know the most about where your most sensitive data exists and, in some cases, how it is protected, so they can inflict significant damage if not properly monitored or security protocols put in place.
  3. Data on the Move: We live in an increasingly mobile world, so another concern has to be when laptops or flash drives are stolen, or back-up tapes are lost in the mail.
  4. Physical Theft: Although having Ethan Hunt fly down an air vent to physically access a secure network is a thing of Hollywood lore, physical theft is in fact a reality. Perhaps, not as dramatic as in film, physical data theft can be as simple as plugging a USB drive into a sensitive.
  5. Employee Error/Negligence/Improper Disposal/Lost: People make mistakes all of the time, so it is expected that at some point someone will do something dumb when it comes to data handling.
  6. Accidental Web/Internet Exposure: As organization migrate more data to cloud-based applications and infrastructure, the likelihood of accidental exposure increases.
  7. Unauthorized Access: This form of data breach is directly attributed to a lack of access controls. Specifically, if admin privileges are poorly monitored or there are no controls of level of privilege within specific applications or even across network resources.

Ignorance is not bliss when it comes to data breaches and just knowing about them is not enough. has an amazing dynamic infographic of “World’s Biggest Data Breaches,” which we highly recommend you spend some time with to uncover the cost of the top data breaches from 2004 through present. Recognize that even though organizations knew theses cyber exploits existed didn’t prevent the magnitude of impact.

The one with the biggest impact is breaches via hacking. Identifying any malicious or hidden code within incoming data files whether on your network or in a cloud is now a cyber imperative. What you don’t know or cannot see can harm you. Find a solution that can identify malicious code within any data set and you will be preventing the potential for significant harm.

For your cyber data breach protection, we suggest a static evaluation technology which is faster, more accurate, not OS version dependent and covers 100 percent of code, with complete visibility.  This is a solution where every line of code is evaluated, without being opened – or executed –  in the first place. Having such a solution will place your organization in a consistent “prevent, don’t remediate” mode which, ultimately, will keep your organization secure and unnecessarily paying hefty recovery costs.

Read more: Inside the SEC’s Statement on Cybersecurity

The post Understanding The Seven Types Of A Data Breach appeared first on

Become a Better Leader By Monday With Emotional Intelligence

Chief Executive Magazine -

Emotionally intelligent leaders are better equipped to manage stress, think clearly, and act decisively.

Technical competencies might get you into management, but it takes emotional intelligence to make you a leader. In fact, research from the Center for Creative Leadership (CCL) found the main reasons for failure ─ struggling to handle change, inability to work in a team setting, and poor interpersonal relationships -are caused by a lack of emotional competence.

Emotionally intelligent leaders are better equipped to manage stress, think clearly, and act decisively. Those who lack emotional intelligence are likely to come off as cold or like a ‘loose cannon’ to others.

The good news is you can develop emotional intelligence by adopting certain habits and behaviors into your daily life. Here are three personal growth tips you can do over the course of a weekend to become a better leader by Monday:

Start a New Hobby

Fun plays a big role in the lives of the emotionally intelligent. They actively seek out enjoyment in their personal and professional lives. This is a sign of strong self-awareness and self-motivation. So, identify a new hobby you want to try and take action.

Leadership Advantages

As you build more hobbies into your life, you will learn how to inject fun into the workday for you and your employees. This reduces stress and builds a more positive, healthy workplace culture.

“If your team is harboring anger and frustration, with no outlet, they’re going to develop resentment and be less productive and happy.”

Try taking up a new hobby as a team. For example, attend a cooking class or take improv lessons together. Not only is this is a fun way to learn new skills, but also it encourages teamwork and builds a stronger sense of camaraderie among co-workers.

Your improved self-awareness and motivation is contagious in the workplace. By leading these fun activities, you’re showing employees the importance of having fun at work and building self-motivation through levity.

Thank a Loved One

The act of expressing appreciation to others or even to yourself helps you focus on the positive side of circumstances. This is an important practice to follow every day.

Aside from helping you see this brighter side of things, gratitude also helps you better connect with others on an emotional level. Start with your loved ones. For example, call your cousin and thank them for a specific favor they did, no matter how small. Tell your spouse how much you appreciate their help around the house. These small gestures have big advantages.

Leadership Advantages

Practicing gratitude is a great method for developing social skills and basic emotional expression. As you learn how to clearly articulate how you feel and what you’re thankful for with loved ones, you can better use that skill with your employees.

And expressing appreciation to your staff makes them feel appreciated, which can boost engagement.

What’s more, gratitude helps build a safe space for your employees to express themselves. This way, they can feel comfortable speaking up and you can respond and help as needed.

Emotions influence people and the decisions they make. If your team is harboring anger and frustration, with no outlet, they’re going to develop resentment and be less productive and happy.  Create a comfortable space by hosting one-on-one sit-downs on a regular basis. Take the time to proactively seek out your employees’ thoughts and concerns. Only then will they feel heard and supported.

Do Something Uncomfortable

Another important aspect of emotional intelligence is self-regulation. When you’re able to monitor and control your emotions, you can face self-imposed doubts and fears.

So, seek out situations that are uncomfortable and likely centered on rejection. For example, ask for a 20 percent discount the next time you order a latte at the coffee shop. This is a polite, safe way for you to step out of your comfort zone. You’re facing the fear of rejection and embracing the discomfort of potential failure.

Leadership Advantages

As a leader, you’re likely to hear ‘no’ and face the discomfort of rejection on a regular basis. For this reason, adopting habits to develop emotional intelligence is important.

This way, if you’re worried about rejection during your next client call, you’ve developed resilience. When your employees provide feedback on your idea, you’re able to control your emotional response and focus on finding a better solution together.

These emotional intelligence practices are essential and easy to start right now. Make the most of your personal time to become a better person and a better leader.

Read more:  Do You Need To Broaden Your Leadership Repertoire?

The post Become a Better Leader By Monday With Emotional Intelligence appeared first on

Five CEOs on Strategy During Uncertain Times

Chief Executive Magazine -

Five CEOs Share Insights Into Strategy During Uncertain Times

CEOs agree we’re living in a VUCA world. VUCA stands for volatility, uncertainty, complexity, and ambiguity. Various CEOs say they’re seeing all aspects of it. Here are five on their strategy during uncertain times.

A Constant Drumbeat

BOB LEDUC, President, Pratt & Whitney, $15.1 billion (revs), 33,500 employees

“I view my most important responsibility to be setting the vision, longer-term mission and near-term objectives of the enterprise. I also need to set expectations about the company culture that’s needed to achieve our goals. It’s then the job of the broader leadership team to cascade these concepts through their organizations to ensure alignment from top to bottom.

And I make a point of reinforcing them constantly in large forums like global employee town hall meetings and executive conferences and in smaller settings like individual performance conversations. I ask my direct reports to tell me what, specifically, they are doing to advance the company’s mission and to foster our desired culture. I expect them to ask the same questions of their teams.

I really believe that it’s not enough to set these expectations once, then move on. A constant drumbeat is needed to maintain focus and is especially important during times of change or challenge.”

Communicate and Share

JOE DEPINTO, CEO, 7-Eleven, $84.5 billion (2015 revs), 31,500 employees

“We do a national video call with all of our field operators every two weeks. It’s about a two-hour call. There are probably 4,000 or so people on the call. They are all linked in. We zero in on a part of the strategy that we want to talk about. They all understand the overall strategy, but we constantly reinforce the importance of executing the strategy this way. We also share case studies of how others across the organization have been successful or have tried different ways to improve different parts of our strategy and have either been successful or failed. They actually get up there and teach their peers and go through their case study in a national forum.”

Instill Peer Learning

TONY GUZZI, CEO, EMCOR, $7.6 billion (revs), 33,000 employees

“We have a very extensive set of what I would describe as peer learning and job learning [programs]. We have peer groups around building information modeling. The CEOs have peer groups around different construction techniques. We have peer groups around safety. Then, we reinforce those peer groups all the time. Plus, we have a lot of communication that goes around those peer groups. When they get together, it’s usually around a learning event—and we’ve taken that down multiple levels. So we have a superintendents’ peer group once a year for mechanical.

We have a superintendents’ peer group for electrical. We have a superintendents’ peer group for service managers. We have a peer group around different kinds of estimating. Now, some will say, ‘Hey, we see this need,’ and we’ll start connecting to different people in the organization, and then we’ll develop a peer group around that. So, there’s an extensive group of peer learning that goes on here.”

Join us at West Point this October for 2018 CEO Talent Summit. Keynote: Laszlo Bock, CEO of Humu, Inc., Author, and Former SVP of People Operations at Alphabet / Google. Co-Hosted by Thayer Leader Development Group. Register today!

Pull People Up

MARGARET KEANE, CEO of Synchrony Financial, $13.5 billion (revs), 15,000 employees

Under Keane, Synchrony developed two to-three-day academies for functions, such as credit, finance and technology. Keane also instituted a range of leader development programs. The company’s STEP Program prepares high potential, non-exempt individuals for management positions.

“We have a lot of non-exempt employees, many in call centers, and the STEP Program is focused on helping them advance. This is a two-year rotational program using experiential learning and development to help them grow out of the non-exempt ranks into the exempt ranks and become managers of people; we’ve had real success with the program. The other positive is that there is a lot of diversity in our non-exempt staff, so we’ve been able to pull people up through the organization and increase diversity in our ranks.”

Consider the What-Ifs

MIKE FUCCI, Chairman of Deloitte, $18.6 billion (U.S. revs), 84,000 U.S. employees

“I’d say the same things that are affecting our clients are affecting us, which is artificial intelligence, robotics, cognitive technology. Our clients are struggling with the question of how they incorporate these innovative technologies into their day-to-day operations. Therefore, if we’re going to consult with them, we need to be ahead of the curve and help them decide how they use this technology. The days when you got by using just the experience you had are gone. We have to anticipate things that aren’t even fully baked yet, but it’s mostly around technology. I call it the ‘everything is a what-if scenario.’

[I]t’s almost a 180-degree difference [from when I joined the firm] as to what people need to be learning and how they learn. We don’t work in offices anymore. We have people in London on the phone with people in New York… people in South Carolina. The way we work is so different that training and learning [are different]. It’s more like an extension of college, as opposed to a way to actually help you build skills that help clients solve problems.

When people enter different levels of their career, we do a lot of work with new senior managers and new partners; it’s helping them learn how to operate differently in those roles, and it’s not just what got you to where you are doesn’t work at the next level. It used to be that that technical experience was all you needed—you had a deep knowledge in something, and you brought that knowledge to clients.

We have to stay in front of disruption with our clients. As the chairman, one of the things that actually concerns me a lot is, how do we govern over disruption? It’s hard enough to manage over disruption. How do we govern over it? So, how do I build really nimble leaders to be able to address a little bit of the unknown? That’s why the VUCA analogy resonates with me, because it’s really more about building leadership than it is about building technical skills.”

The post Five CEOs on Strategy During Uncertain Times appeared first on

Strativity Group CEO Lior Arussy On Why Constant Change Is The New Normal

Chief Executive Magazine -

Strativity Group CEO and cofounder Lior Arussy knows that change isn’t just something business leaders adapt to—it’s the new normal. For CEOs and their employees, the days of stability and predictability are a thing of the past, and constant change and upheaval across the business landscape is just reality.

In his new book out today, “Next Is Now: 5 Steps for Embracing Change—Building a Business that Thrives into the Future,” Arussy shares his five-step “Future Ready Impact” program, and guides change-impacted CEOs and their employees from a victim mentality to one of participation and ownership.

Chief Executive spoke with Arussy about how organizations are dealing with resilience to change, why employees need to lead the charge in change transformation and what the future holds for businesses in this new business ecosystem. Here’s what he had to say:

The lowdown on “the new normal”

Let me start with the study that we released in the book that we had done with Harvard Business Review. We talked to 422 companies and asked them about the success of their different types of change initiatives, and the reasons why they didn’t succeed. To our surprise, 91% have declared their change initiatives as a failure, something that didn’t meet their original goals. They needed to redo them, probably down-scope them, and change them. And if you change the word “change” with the word “strategy,” because, usually, a change initiative is about implementing a strategy, you are chasing a very, very dangerous mandate here.

Basically, companies are coming up and CEOs are developing strategies to survive and to thrive into the future, and 91% of those are not achieving their goals. Which means that organization’s survival in future is at risk, because they are fighting against forces that are trying to hold back the organization in old and less-relevant market positions. And that is why every CEO needs to go and check, not the quality of their strategy, but the quality of their readiness for change, or what I call the new core competence of organizations—change resilience. The scale and the scope in which you actually execute and embrace the initiatives. That’s why it’s so critical, because it’s at the essence of the organization, being able to be relevant to today’s and future customers.

Taking ownership of change initiatives

Looking at over 200 transformation projects around the world, here is what we learned: A strategy’s success is not dependent on the CEO’s decisions, and leading a strategy from the top down is not going to accelerate anything. Instead, what the book is advocating is what we call “employee-led transformation.” You see, the success of the transformation, the success of the strategy, is in the hands of the people who are working for you, and they’re the ones, in the daily decisions, who are either activating it or deactivating it.

What we found out is, because of a lot of misconceptions around change and around transformation, employees are wasting their time rejecting it in a very, very creative way. In fact, in the book I name six different personas of change rejection, which will be fascinating to see. People are very, very creative when it comes to this, and as a result of it, are basically holding the organization’s future hostage because they are refusing to adopt. They don’t have a high change resilience. There’s a very low change resilience, and the people’s reaction is, first, no.

I’ll give you an example: I remember working with a financial services organization, and one of the employees in a focus group said to me, “Look what the CEO is doing to us now with all these digital platforms.” And I said, “Stop for a second. What is the CEO doing to you? Did you ever stop to think that maybe Facebook and social media happened to your CEO in the same way that it happened to you? Yeah, maybe he sees the same exact trends, but the difference between him and you, or her and you, is that he took action and tried to do something about it, and you are trying to take all the excuses possible to stop from taking action.” What we’re introducing here is the need to treat every employee as they are the CEO, engage them in a structured decision process that has them own the transformation, not just execute the transformation.

The future of change resilience

I think that one of the new criteria that you’re going to have to incorporate into our hiring of our new talent is change resilience. Let me give you an example from an industry that we are very involved in, the automotive industry. The automotive industry right now is facing a variety of trends. Autonomous driving is coming, electric cars are coming in larger numbers, subscription is on the horizon, we’re talking of not even owning a car anymore, and of course the sharing economy. And given the multitude of organizations trying to forecast with a crystal ball what’s going to happen, until they know it, they freeze and they basically wait until the answers are provided for them.

With change resilience, I will tell you that the future will belong to the ones who are willing to experiment, who are willing to embrace successes of the others and not wait until others do it. And the two defining success factors are not going to be the quality of your product or the amount of inventory that you have, but rather the depth of your knowledge of your customers and your ability to change your business to respond to those evolving changes. This is a completely different change, a different value proposition from being in the metal business, to really becoming the memories business. So, when you look at the future, companies will have to incorporate into their hiring and nurturing criteria the notion of, “How do I keep my talent change resilient, so we embrace those things faster, we can experiment faster, we can fail and move forward faster, but ultimately we’re going to stay ahead of the curve and own the future and be future-ready?”

The post Strativity Group CEO Lior Arussy On Why Constant Change Is The New Normal appeared first on


Subscribe to Lonergan Partners aggregator - CEO Corner