Brandt On Leadership -- Leaky, Sneaky And Cheeky

Oct. 11, 2006
There's no management innovation too bad or too bald for some companies.

One of the wonderful things about studying leadership and management is that just when you think you've seen or heard it all, somebody invents something so new and wonderful and innovative that you have to shake your head and say, "What'll they think of next?" Here are a few of the exciting things that I've learned in just the last few months:

Spying isn't just for the government, it's for corporate boards, too: While senior executives have always reserved the right to spy on their employees (if you don't believe me, just check your corporate e-mail policy), most drew the line at spying on each other. This was especially true at the board level, where camaraderie and trust and an unspoken code of ethics prevailed. Fortunately, Hewlett-Packard's board has now rescued us from such old-fashioned notions as privacy and fair play, authorizing an investigation of boardroom leaks that, in the words of Rep. John Dingell, D-Mich., "would make Richard Nixon blush, were he still alive." Along with traditional gumshoe tactics such as surveillance and a sting operation in which a fake HP exec contacted a reporter (to try to get the reporter to reveal other sources), operatives also used "pretexting," in which they contacted phone companies and pretended to be HP Board members asking for their own phone records.

(Note: Even though pretexting seems like lying at best and fraud at worst, don't worry; HP's outside counsel said in an e-mail as the scandal brewed that it "appears, therefore, that the process was well done and within legal limits." Then again, the same lawyer later told a congressional subcommittee that pretexting "is probably illegal." Well, you can almost hear the HP Board saying, thanks for clearing that up.)

Sneaky CEOs will always find a way to get paid more, even if they have to use a time machine to do it: Just when you thought that Sarbanes-Oxley and various prosecutions had closed every devious compensation loophole, a diverse group of CEOs and boards figured out that if they took Einstein at his word -- that time is, in fact, relative -- they could award themselves in-the-money options retroactively by backdating grant documents, or by forward-dating options in anticipation of good news.

More than 80 corporations are now under investigation regarding mispriced options, but by far the most creative is an innovation pioneered by Cablevision, in which an executive was awarded backdated options after he was already dead. With the right comp plan, apparently, you can take it with you.

There is no limit to how badly you can treat customers on an airline: I realize that this seems to violate the laws of physics, yet US Airways managed to confirm this mind-bending reality on a recent flight from Las Vegas to Philadelphia. Not only was there no meal -- not even one of those deals where you pay $5 for a lump of ham and slimy cheese on a frozen bun -- there weren't even peanuts. Or pretzels.

To be fair, though, even if there had been food on board, the flight attendants probably wouldn't have had time to distribute it, given their new duties as hawkers of US Airways credit cards. That's right: After you pay your hard-earned cash for an uncomfortable seat on an overcrowded plane, US Airways then plays commercials for its own credit card over the loudspeaker while its attendants walk up and down the aisles waving applications. This is cross-marketing at its most brilliant: Make your hungry, irritable customers pay hundreds of dollars to be held hostage by telemarketers. Genius!

Or, as Lily Tomlin once said, "No matter how cynical you get, it is impossible to keep up."

John R. Brandt, formerly editor-in-chief of IndustryWeek, is CEO of the Manufacturing Performance Institute, a research and consulting firm based in Shaker Heights, Ohio.

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