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Number of posts : 305
Age : 68
Registration date : 2007-10-04

PostSubject: CEO'S SECRET HAND BOOK   Fri Mar 28, 2008 9:17 pm

The CEO's Secret Handbook

Imagine a lifetime's worth of executive wisdom, boiled down to a handy pocket-size guide. Corporate leaders swear by it -- but it's not for sale. Lucky for you, we've excerpted the best parts.
By Paul Kaihla, July 2005 issue

It started decades ago as flashes of insight scribbled on loose scraps of paper. Then it morphed into a PowerPoint presentation that distilled years of business wisdom into a handful of easy-to-remember aphorisms. Last year it became a 76-page spiral-bound booklet clad in a plain gray cover. Eventually, Warren Buffett received a copy -- and liked it so much that he asked for dozens more to give to his CEOs, friends, and family.
The tiny handbook has become an underground hit among senior executives and management thinkers. Written by Bill Swanson, CEO of aerospace contractor Raytheon (RTN), Swanson's Unwritten Rules of Management is part Ben Franklin and part Yogi Berra, with a dash of Confucius thrown in. Former General Electric (GE) CEO Jack Welch says there's something about both the man and his management style that makes the gray book a worthwhile read for any CEO. "It's a neat little manual, and each of these rules makes sense," Welch says. "It covers almost everything, and I like Swanson's feet-on-the-ground approach." Bruce Whitman, president of FlightSafety International, a Berkshire Hathaway (BRK) company that's one of the world's largest aviation training firms, goes even further: "The book is something you can carry around with you like a Bible and live by every day."

Swanson has a knack for making complex ideas easy to grasp. His folksy rules may seem simplistic, but they point to proven management data. "Research shows that when people are in a good mood at work, it builds emotional capital and enhances productivity," Goleman says. "The art of leadership is getting work done well through other people, and laughing together is one of the best ways to do that."

Learn to say "I don't know." If used when appropriate, it will be used often.
How many times have you been in a meeting with someone who felt compelled to contribute, even though he obviously had no idea what he was talking about? In those circumstances, silence is golden. As a CEO, you know that everyone wants to impress you, so I sometimes ask a question to which I already know the answer as a way to test someone's character. Confident people know their strengths and weaknesses, and they don't try to b.s. you. You are not expected to know the answer to everything. Smart people simply say "I don't know" -- and go get an answer.

"The only way to be successful is to be able to say 'I don't know,' both to yourself and to others. You have to know the parameters of your own competence. I've said 'I don't know' in front of a group of people where I'm embarrassed to do so but then discovered that they respect you for it. When you try to kid yourself or others, you always get a bad result. The truth always surfaces. A lot of people in business these days trap themselves by putting on a facade. I remember my father telling me when I was 11, 'It takes you 30 years to build a reputation, but you can ruin it in 30 seconds.' That could be another rule."
-- Howard Buffett, director, Berkshire Hathaway; president, Howard G. Buffett Foundation

You remember 1/3 of what you read, 1/2 of what people tell you, but 100 percent of what you feel.
If a parent tells a young child not to touch a lightbulb, the child generally won't remember. But after the first time he touches a lightbulb, he'll never forget that it's hot. A leader needs to communicate in a way that makes people feel what they need to do. I was reminded of this a couple of years ago during a visit to Nellis Air Force Base. I introduced myself to a pilot, and he looked me in the eye and said, "If it wasn't for what you all do, I wouldn't be here today." A missile had been launched at his F-15, but we make a decoy, which he deployed. The decoy didn't come home -- but he did, to his family. I use that feeling to remind everyone that people's lives depend on the reliability of our products.

Look for what is missing. Many know how to improve what's there; few can see what isn't there.
This is one of my favorites. It hit me in the middle of the night. It isn't an obvious lesson; it only came to me later in my career. When people look at a design or a problem, they're good at refining the details -- it's human nature to focus on what's in a presentation. But sometimes what isn't there is even more important. This idea becomes especially critical as you take on more responsibility, because it speaks to the importance of strategic thinking.

"It's not what people say; it's what they don't say. Good leaders have to look around corners: What are we not talking about that we should talk about? Here is an experiment: If you're working on an important contract, a 'must-win' program, give your team a much shorter deadline than what actually exists. Afterward you tell your team, 'I just got a phone call from the buyer today and he told us that we lost -- he didn't tell us why.' You ask them why you lost. You'll be amazed at how they come up with things that they hadn't thought about before. It forces people to think about what was not said instead of what was said. As soon as you capture what your team is guessing, you use those points to rework your proposal. That's worked for me on many occasions. I tell them, 'I was just kidding. We have six months to improve, so why don't we incorporate those as product or proposal improvements.'"
-- Steve Loranger, chairman, president, and CEO, ITT Industries

Have fun at what you do. It will be reflected in your work. No one likes a grump except another grump!
We all spend plenty of hours at work. It's much more pleasant to spend those hours with people who have a bounce in their step and a smile on their face than with those who mistakenly associate professionalism with a dour disposition. I don't like being around depressing people because they make me depressed. The best managers give of themselves by having fun at what they do -- and I look for that in those around me.

"Having fun is not a waste of time, because any good leader makes people feel good about what they do. By having a good time together, you build the kind of emotional capital that means people will be there for you when the pressure is on and you need them the most. There's a scientific explanation for this: The human brain has cells called mirror neurons, and they do nothing but scan for smiles and laughs. When they see one, they make a smile and laugh in return. When people are in a good mood at work, research shows that they have better access to optimal cognitive efficiency. I would predict that it enhances both productivity and creativity. The art of leadership is getting work done well through other people, and laughing together is one of the main instruments of that."
-- Daniel Goleman, author of Emotional Intelligence and coauthor of Primal Leadership; Ph.D. in clinical psychology, Harvard University

When faced with decisions, try to look at them as if you were one level up in the organization. Your perspective will change quickly.
This is analogous to how much smarter my mom and dad suddenly seemed when I emerged from my teenage years and found myself in my 20s. When you see the world from a higher perch, you take in more of the landscape. In 1984, I was put in charge of 7,000 people at a missile facility in Massachusetts. Before that, I'd been in smaller, more individual roles where I could get my arms around the whole job and do most everything myself. Making the leap to leadership means learning to delegate. You receive inputs, and you make decisions. You find out how brilliant your boss really was when you follow him or her into a position. I may have criticized my bosses once or twice, but when I got their jobs, I generally found that they'd made the best decisions they could have with the facts they had at hand.

If you are not criticized, you may not be doing much.
When someone assumes a position of responsibility for the first time, it's common to avoid decisions -- and the risk of criticism. But that only creates different risks. Problems are not like wine and cheese; they don't get better with age. In 1998 we undertook the largest rationalization in the history of our industry. We closed a third of the company's square footage and let go more than 25 percent of our 90,000 workers. We had five missile plants. We now have one. I know that many people were hurt by the consolidation. But if we hadn't done it, Raytheon might be out of the missile business today. Instead, we've become a $20 billion powerhouse.

When something appears on a slide presentation, assume that the world knows about it and deal with it accordingly.
When people assure you that proprietary or confidential information you are looking at on the screen will never leave the room, assume that it already has.

A person who is nice to you but rude to the waiter -- or to others -- is not a nice person. (This rule never fails.)
Watch out for those with situational value systems -- people who turn the charm on and off depending on the status of the person with whom they're interacting. Those people may be good actors, but they don't become good leaders. There's a consistency in leadership that's greater than mere situational awareness. I was reminded of this recently while dining at a high-end restaurant with several other CEOs. One guy's meal didn't come out right, and he decided to take the waiter down a peg or two. The poor server didn't prepare the food -- he simply carried it from the kitchen! I looked across the table and thought, "What the hell is this guy trying to prove?"

"If a new hire treats everyone they perceive as subordinate poorly, you'll have discord in the ranks. The more senior the new hire, the wider the ill effect. Likewise, salespeople who fail the waiter test are also the kind of people who pay lip service to the idea of treating customers with respect but are more often looking for ways to maximize the money they extract than trying to deliver maximum value. That can be a very big problem for everyone. The possibility of being sued is another thing you can reduce the risk of by looking for that type of behavior."
-- Paul Graziani, co-founder, president, and CEO, Analytical Graphics

When facing issues or problems that are becoming drawn out, "short them to ground."
This metaphor comes out of my engineering training. "Shorting issues to ground" means finding the quickest path from problem to solution. If you sense that your organization is spending more time on the bureaucracy of problem-solving than on actually solving problems, it's time to simplify the process.

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