By Peter Faur

I've decided to change the way I approach my presence on the Web. Instead of working from www.rightpoint.info and blog.rightpoint.info, I'll now be using http://www.peterfaur.com as my one, consolidated site.

It's a simple site. It will allow me to blog and to promote my consulting services from one URL. Over time, the blog entries will build. I'll continue to write about CEOs but also tackle other topics. My tagline for the site is "Tips and Thoughts About Communicating and Living in the 21st Century." I'll try not to be too pretentious, and I hope you'll be engaging.

Thanks for stopping by this site, and please subscribe to the new one. I look forward to seeing you over on the new site.

        

By Peter Faur

Stanford University researchers David Larcker and Anastasia Zakolyukina recently tried to figure out whether they could spot clues about when CEOs are being less than honest during their quarterly earnings calls. They were able to do so as much as 65 percent of the time - not perfect, but certainly helpful when you're trying to figure out whether you can trust a company's management with your money. You can read the full study here.

The researchers built a model that tries to ferret out executive lies according to verbal cues from speakers. The team then ran the transcripts of nearly 30,000 earnings calls that took place between 2003 and 2007. By going back to see which companies restated earnings after the calls took place, they smoked out which CEOs might have been hiding something.

In fairness, I can testify that earnings restatements aren't always evidence that companies have lied on the earnings call. Honest mistakes in earnings calculations happen. Even so, Larcker and Zakolyukinia's research provides some interesting cues to remember the next time you're listening to a call:

• If you start hearing lots of references to "the team" and "the company" instead of "I" and "we," be on the lookout. Presumably, there's comfort in being part of a crowd if you're going to fudge the truth a bit.
• Exaggeration can be another telltale sign. Words like "solid" and "respectable" get jettisoned in favor of words like "fantastic" and "great."
• You'll hear references to general knowledge with phrases such as "you know," "as you know" and "others know well."
• You won't hear the phrase "shareholder value" mentioned with much frequency.
• You'll hear short statements that are rushed through quickly, as though untruths have been scripted and need to be gotten past quickly.  

The study also suggests that CFOs tend to be more cautious on calls than their CEO bosses. My own experience bears this out. I've seen that CEOs often are cheerleaders and want to see rosy futures, whereas CFOs are more matter of fact and analytical in their approach.

If you want to listen to a few earnings calls to see whether you can spot a fibber, here's a list of calls taking place this week. Let me know whether you listen in and whether you think you've found a candidate for a future earnings restatement.

Grammar tip: You flout the speed limit by continuing to ignore it. You flaunt your speedy car by showing off its ability to break the speed limit.

Thanks for visiting The Right Point. While you're here, please look around the blog. (Use the"More RightPoint Entries" link in the right-hand column if you landed here directly.) You can subscribe via e-mail or RSS feed. The tools to do so are in the right-hand column. To share or retweet the entry, use the "Share This" tool in the right-hand column. You can follow me on Twitter at http://twitter.com/peterfaur.

        

By Peter Faur

Ed Whitacre, who has been one of America's most visible CEOs for the past two decades, announced Thursday that he's stepping down as CEO of General Motors. After heeding President Obama's call last year to come out of retirement, he's turning over the CEO post in three weeks to Dan Akerson. Before the year is out, Akerson also will take on the title of chairman as Whitacre (pictured at right) withdraws entirely.

Whitacre, 68, can leave with pride. GM has posted two profitable quarters in a row, including $1.3 billion in earnings for the quarter ended June 30. He's made the best of a company that found a new lease on life after shedding a pile of debt and obligations through bankruptcy proceedings.

Like Whitacre, formerly of AT&T, Akerson comes from the telecommunications industry. He made a mark for himself at MCI and Nextel. He has served on the GM board for the past year but has never run an auto company. There's nothing wrong with that, however. Whitacre quickly led GM to marketing and sales success during his brief time at the company, and Alan Mulally, formerly a Boeing executive, has succeeded admirably in turning Ford around. Akerson seems to be cut from the same cloth and should do well, but he will have to prove himself.

What's not clear is why Whitacre would choose to leave now. GM is close to issuing a new stock offering, and investors certainly would feel more comfortable if he were around to take the company public again. Whitacre said he saw it as his public duty to help return GM to greatness, and he didn’t want to stay a day beyond that.

Most Americans are rooting for GM to succeed. At its peak, the company was not only a business leader but a leader on social issues as well. It would have been good to see a less abrupt change in leadership. We can only hope that Akerson will continue Whitacre's winning ways.

Grammar tip: "Peruse" means to read carefully. It is often misused to mean "to glance over quickly."

Thanks for visiting The Right Point. While you're here, please look around the blog. (Use the"More RightPoint Entries" link in the right-hand column if you landed here directly.) You can subscribe via e-mail or RSS feed. The tools to do so are in the right-hand column. To share or retweet the entry, use the "Share This" tool in the right-hand column. You can follow me on Twitter at http://twitter.com/peterfaur.

        

By Peter Faur

By now you've heard that HP's board of directors has ousted CEO Mark Hurd, who put the company back on track after taking over for controversial ex-CEO (and current U.S. Senate candidate) Carly Fiorina. Depending on which news organization is telling the story, the board forced out Hurd because:

• He fudged on his expense account.
• He conducted a reportedly nonsexual dalliance with independent marketing contractor and sometime actress Jodie Fisher.
• He paid Fisher for services to the company that were never rendered.
• He failed to live up to the standards and principles of trust, respect and integrity that he espoused at HP.

Not everyone agrees that Hurd should have been fired. Larry Ellison, CEO of Oracle and, like Hurd, a Silicon Valley power, says the HP board has betrayed employees, shareholders, customers and partners by firing Hurd. "The H.P. board just made the worst personnel decision since the idiots on the Apple board fired Steve Jobs many years ago," Ellison wrote."That decision nearly destroyed Apple and would have if Steve hadn't come back and saved them." Ellison said the board investigated the sexual harassment charges and found them to be false, so Hurd should be allowed back.

I don't think it's that simple. Hurd authorized HP payments to Fisher for marketing materials that were never delivered and perhaps marketing appearances that were never made. That's theft on his part and probably fraud on hers.

It's not as simple as letting him pay the money back, which he certainly could. We don't cut deals with bank robbers to let them off if they just return the money, and HP's board wisely is not about to make such arrangements with Hurd.

We're rightly outraged when CEOs, public officials and others in power abuse their rank. Hurd abused his rank, and HP's board held his feet to the fire. Shareholders and the rest of us should be applauding. Actions like this are the only way CEOs and senior executives will get the message that leadership is not about privilege but about integrity, sacrifice and putting the good of others above oneself.

What do you think? Would you have fired Hurd if you had been on the board?

Grammar tip: Here's a helpful list of reference sources from Webgrammar.com.

Thanks for visiting The Right Point. While you're here, please look around the blog. (Use the"More RightPoint Entries" link in the right-hand column if you landed here directly.) You can subscribe via e-mail or RSS feed. The tools to do so are in the right-hand column. To share or retweet the entry, use the "Share This" tool in the right-hand column. You can follow me on Twitter at http://twitter.com/peterfaur.

(Mark Hurd photo by Dan Farber)

        

By Peter Faur

The one magazine I've subscribed to consistently over the past 20 years has been Newsweek. I thought it was the perfect balance of current events, analysis and opinion, I've always enjoyed its light-hearted looks at Conventional Wisdom (who's up, who's down, who's somewhere in between) and The Index (the good, the bad and the ugly news makers of the week). The media fail woefully at covering religion in any meaningful way, but Newsweek was a pleasant exception to the rule.

I've stuck with the magazine despite the major changes of the past year - less coverage of current events, more analysis, more opinion, fewer pages. Frankly, though, the magazine has lost its moorings, and two days ago, it was sold by the Washington Post Co. to 92-year-old Sidney Harman, founder of audio equipment maker Harman International.

Normally, you'd lay the blame for a failed editorial approach at the feet of the executive editor, Jon Meacham. In this case, however, Meacham seems to have gotten dragged down by the machinations of CEO Tom Ascheim (pictured above).

Ascheim, who came to Newsweek from Nickelodeon, devised a strategy of cutting the magazine's subscription base in half, raising the cover price and, theoretically, creating an audience that would be upscale and more attractive to advertisers. Ascheim ordered a redesign of the magazine into the limp product it is today.

As the more visible representative of the magazine, Meacham often took heat for Ascheim's decisions. He's using the sale as an opportunity to move on to the next phase of an impressive career, and he's leaving gracefully.

The question is, why should Ascheim be allowed to stay?

Admittedly, he and Newsweek have faced a tough environment. National magazines are on the decline, and Ascheim has been fighting a tough battle. His strategy to turn Newsweek from a mass-market vehicle into an upscale magazine has failed, however, and it will be difficult for the magazine to regroup and recover.

Harman seems to be taking his new challenge on as a labor of love. He's paying $1 for the magazine, and he's assuming about $70 million in debt. He's not in it for the money, but for the magazine to continue, it will have to turn a profit. Harman needs someone strong in the magazine business. Ascheim has proved he's not up to the challenge, and he should go.

Grammar tip: A levee is a structure built to raise the height of a river's banks. A levy is a tax, fine or assessment.

Thanks for visiting The Right Point. While you're here, please look around the blog. (Use the"More RightPoint Entries" link in the right-hand column if you landed here directly.) You can subscribe via e-mail or RSS feed. The tools to do so are in the right-hand column. To share or retweet the entry, use the "Share This" tool in the right-hand column. You can follow me on Twitter at http://twitter.com/peterfaur.

        

By Peter Faur

Tales of mean rich people have sold well over the centuries. Even today, it's not unusual to see yet another telling of A Christmas Carol and its sour, stingy main character, Ebenezer Scrooge. Despite his change of heart in the Dickens' story, his name is still associated with miserliness and meanness.

Now there's a new study suggesting that the higher paid a CEO is, the more likely he and his organization are to treat rank-and-file employees meanly. The study, conducted by Sreedhari Desai at Harvard, Jennifer George of Rice University and Arthur Brief of the University of Utah, concludes that“increasing executive compensation results in executives behaving meanly toward those lower down the hierarchy.”

To conduct the study and make the claim, the authors had to define meanness. To do so, they assigned  “strength points” and “weakness points” to companies. Companies that offered employee profit sharing received strength points. Companies that have been penalized for employee mistreatment got dinged with weakness points. The authors then looked at each company’s executive compensation for correlations between executive income and meanness. They found a positive correlation; as executive income rose, meanness rose.

In the study, the researchers cited everyone's favorite whipping boy, Walmart, which has a large gap between executive pay and worker pay. "Walmart continues to make headlines year after year for violating wage laws, failing to provide adequate health care to employees, exploiting workers, taking an anti-union stance, and violating human rights in foreign countries. Some of the gory details involving its overseas operations include denying workers minimum wage, compulsory overtime, failing to provide adequate safety equipment to workers, and hiring child labor. Back in the U.S., Walmart’s executives’ behavior toward their employees has been just as mean."

Read the study and draw your own conclusions. I've worked with highly paid CEOs and other senior executives. My experience has been that each is an individual case. I've run across my share of Scrooges, but I've also worked with a number who are decent, motivating team builders.

I've observed over the years that those who come up through operations, such as plant managers, seem to be more concerned about the concerns, needs and well-being of workers than those who spend their career in the ivory towers of law, accounting and finance. It seems to be easier to think of workers as pieces in a game if you haven't spent much time with them.

What do you think? Does money breed meanness in corporate life?

Grammar tip: I recently saw someone write that a person had come within a hare's breath of winning a job, meaning the person was close but didn't get the job. The correct phrase is "a hair's breadth." A hair is really thin, so if you come within a hair's breadth of something, you've come really close.

Thanks for visiting The Right Point. While you're here, please look around the blog. (Use the"More Right Point Entries" link in the right-hand column if you landed here directly.) You can subscribe via e-mail or RSS feed. The tools to do so are in the right-hand column. To share or retweet the entry, use the "Share This" tool in the right-hand column. You can follow me on Twitter at http://twitter.com/peterfaur.

        

By Peter Faur

A few months ago, I wrote about the idea that a CEO now has to be the chief engagement officer. I commented that many CEOs would find this notion to be too "touchy feely" and might gag on it. At least one, however, seems to get it.

Vineet Nayar, CEO of India's HCL Technologies, aspires to nothing less than inverting the pyramid in his company, an information technology provider that employs nearly 60,000 people. Fortune magazine has said he embodies "the world's most modern management style." Stop by his latest blog entry at the Harvard Business Review website to see why.

Nayar notes that most companies have remade themselves from top to bottom during the past few years. The economic downturn forced a self-examination that made most companies more efficient and better able to withstand future economic storms.

The one exception to the "top to bottom" remake, Nayar notes, is that few CEOs have taken time to think about their own roles in a new organization. It's crucial to do so, he says. Value used to be created in the "control zone," where CEOs and senior executives reside to set strategy, policy and quality control processes. Now, he maintains, most value is created on the front lines of an organization, where customers and employees interact. In this new world, it's the job of the CEO to empower employees and give them the tools they need to create value.

It would take quite a person to make the transition from being in the spotlight to pointing the spotlight toward others. Tony Hsieh of Zappos does it. Gary Kelly of Southwest Airlines seems to do a good job.

Do you know CEOs who do this, and are they seeing a payback for their efforts?

Grammar tip: A regimen is a system of order and often refers to a systematic dosing of medicine. A regiment is a military unit.

Thanks for visiting The Right Point. While you're here, please look around the blog. (Use the "More RightPoint Entries" link in the right-hand column if you landed here directly.) You can subscribe via e-mail or RSS feed. The tools to do so are in the right-hand column. To share or retweet the entry, use the "Share This" tool in the right-hand column. You can follow me on Twitter at http://twitter.com/peterfaur.

        

By Peter Faur

Michael Bloomberg made it look easy. Build a profitable financial information empire, prove your mettle, then succeed in the field of public service. In 2008, New Yorkers actually changed the mayoral term limit specifications in their city charter to allow Bloomberg to run for a third term.

Now other CEOs want to follow in his footsteps. Meg Whitman, former CEO of eBay, is running for governor of California. Carly Fiorina, onetime CEO of HP, is on the ballot to run for U.S. senator from the same state. And Linda McMahon, former CEO of World Wrestling Entertainment, is going to the mat to try to beat opponent Rob Simmons for the job of U.S. senator from Connecticut. (That's McMahon in the photo with her husband, Vince. Her combat skills might come in handy in the Senate.)

All of these women point to their experience as CEOs as evidence of their ability to be political leaders. But are they right? Does success in business necessarily translate to success in governance?

Not necessarily, says Michael Useem, a management professor at the Wharton School of the University of Pennsylvania and director of Wharton's Center for Leadership and Change Management. On the Knowledge@Wharton website, Useem notes that most CEOs have learned to mobilize and motivate people, and that's a valuable skill both in the private and in the public sector. CEOs usually learn to be good communicators as well, and that can serve them well in political life.

On the other hand, CEOs work in an environment in which people are paid to band together for a common purpose. Politicians, on the other hand, face constituents with a variety of agendas. Unlike CEOs, they have to practice the art of compromise, and their power comes from their ability to persuade, not from sitting at the top of a chain of command.

Politicians also work in a more ambiguous world. For CEOs, success is a black-and-white proposition. You either make the numbers or you don't. It's not so simple for politicians, especially not for legislators. For better or worse, the impact of a law passed today might not be seen until years or decades later. This can frustrate CEOs, who usually get quick feedback about whether their initiatives are on course or not.

I believe voters, who are frustrated with professional politicians, increasingly will try their chances with CEOs and other candidates with business backgrounds. There's no guarantee, however, that experience and success in business will translate into success as a legislator or government executive.

What do you think? Are you looking forward to having more business people become politicians?

Grammar tip: A bazaar is a marketplace. Something odd or unusual is bizarre.

Thanks for visiting The Right Point. While you're here, please look around the blog. (Use the "More RightPoint Entries" link in the right-hand column if you landed here directly.) You can subscribe via e-mail or RSS feed. The tools to do so are in the right-hand column. To share or retweet the entry, use the "Share This" tool in the right-hand column. You can follow me on Twitter at http://twitter.com/peterfaur.

        

By Peter Faur

You’ve heard it said that power corrupts. Researchers at Columbia Business School have figured out why, at least in part. It turns out that once people are given a little power, they find it easier to lie.

The average liar sends out “tells,” signs that he or she is lying. The act of lying causes negative emotions, physical stress and the fear of being caught, which in turn leads to behaviors such as fidgeting or a change in the rate of speech. When people gain power, the signs aren’t as likely to be seen.

“Power, it seems, enhances the same emotional, cognitive and physiological systems that lie-telling depletes,” said Dana Carney, a management professor at Columbia. “People with power enjoy positive emotions, increases in cognitive function and physiological resilience such as lower levels of the stress hormone cortisol. Thus, holding power over others might make it easier for people to tell lies.”

To test their hypothesis, Columbia researchers told some research subjects that they were to think of themselves as leaders and gave them large offices. Other subjects were told to think of themselves as subordinates and were given small, windowless offices.

All subjects were asked to find $100 nearby and then, through a computer, half were instructed to put the money back and half were instructed to steal the money.  All were then told to convince a researcher that they did not take the money. If they could convince the researcher – whether they were lying or not – they were promised that they could keep the money.

The subjects were taped to see whether they exhibited any signs of lying, and researchers also took saliva samples from them to gauge stress hormone levels. The “leaders” proved to be much more adept at lying without being caught than the “subordinates.”

Lying can be a valuable skill, and it can be used for ethically justifiable outcomes. We want a national leader, for example, to be able to bluff terrorists hellbent on destruction into believing that we hold the upper hand, even if we don’t in a specific situation.

Usually, however, people lie because they have something to hide or something to gain. Those in power face temptations to abuse their position, and if they are adept at lying, they can get away with it, at least for a while. I still believe that sooner or later, the truth will out. Until it does, liars can hurt many people and cause lots of damage.

That’s why it’s critically important to have leaders of integrity who are honest enough with themselves to know they are never immune from temptation. They welcome scrutiny and inspection, and they understand that their example and behavior set a tone for their entire organization.

Contest winner: The winner of last week’s contest to win a copy of Delivering Happiness, the new book by Zappos CEO Tony Hsieh, is Penne Pojar of Denver, Colorado. Thanks to all of you who shared your thoughts.

Grammar tip: I passed a car on the road this morning. That event occurred in the past.

While you're here, please look around the blog. (Use the "More RightPoint Entries" link in the right-hand column if you landed here directly.) If you wish, you can subscribe via e-mail or RSS feed. The tools to do so are in the right-hand column. To share or retweet the entry, use the "Share This" tool in the right-hand column. You can follow me on Twitter at http://twitter.com/peterfaur.

        

By Peter Faur

Last week, I wrote about Zappos CEO Tony Hsieh and why he sold his company to Amazon. Briefly, he sold it so he could preserve the culture of happiness he had created for the company's employees. He's a firm believer that happy employees will deliver extraordinary customer service, more repeat business and, ultimately, more profits. (Excellence guru Tom Peters is making the same case these days.)

I was intrigued enough by the early coverage of his book to buy a copy,and I've liked what I've read - so much, in fact, that I want to do my part to spread Tony's message by giving away a copy of the book, Delivering Happiness: A Path to Profits, Passion, and Purpose.

Hsieh, at age 35, has definite ideas about building a strong company, and they're all built on a foundation of strong culture.  To give you a taste of what you'll read, here are the 10 core values that guide everything Zappos does:

1. Deliver WOW through service.
2. Embrace and drive change.
3. Create fun and a little weirdness.
4. Be adventurous, creative and open-minded.
5. Pursue growth and learning.
6. Build open and honest relationships with communication.
7. Build a positive team and family spirit.
8. Do more with less.
9. Be passionate and determined.
10. Be humble.

I know what you're thinking. Most companies that do these kinds of drills - vision, mission, values - end up shelving all the work because they don't bother to do much more than pay lip service to what they've created. This doesn't appear to be the case with Zappos, and it's because the man at the top doesn't let it happen.

So what do you have to do for a chance to win a copy? Simple. Just leave a comment telling one key leadership or management principle you learned from a boss you admired. I'll keep the contest open through midnight PDT Friday, June 18, and announce the winner, selected at random, next Monday.

For a second chance, send a tweet directing people to this entry with #rightpoint in your text. Use the "Share This" tool in the right-hand column to send your tweet.

And if you like what you see here, go ahead and subscribe by e-mail or RSS feed. Tools to do so are at the top of the right-hand column.

I'm looking forward to your comments. Good luck!

Grammar tip: Know the difference between "apprise" and "appraise." When you estimate the value of something, you appraise it. When you inform people of a situation, you apprise them of it.

While you're here, please look around the blog. (Use the "More RightPoint Entries" link in the right-hand column if you landed here directly.) If you wish, you can subscribe via e-mail or RSS feed. The tools to do so are in the right-hand column. To share or retweet the entry, use the "Share This" tool in the right-hand column. You can follow me on Twitter at http://twitter.com/peterfaur.