Monthly Archives: May 2016

How to Embody Authentic Coachability

Author and motivational speaker Charlie “Tremendous” Jones once said, “You’ll be the same person in five years as you are today except for the people you meet and the books you read.”

It’s one of my favorite quotes, and applies to my own personal experience. I’ve had some amazing mentors, from the CEO of Avon to Fortune 500 execs, a governor, and various venture capitalists. Yet a substantial amount of my leadership philosophy is gleaned from reading great authors, or everyday people I’ve met along the way — including a lot of incredible teammates.

Authentic coachability really requires extreme effort by the leader to be on the receiving end of it — from anyone in the organization. I’ve found coachability among the most vital attributes in an organization, culturally and individually. Too often, executives get defensive, and this unwillingness to be challenged simply cascades downward. To me, there are few things more inspiring towards the effort of personal development than hearing the CEO say, “You know what? You’re right, I’ve got to get better at that.”

Do the right thing. My commencement speaker for my undergrad program was Mitch Daniels (who later became a mentor). At the time Mitch was a pharmaceutical exec, and  later became Governor of Indiana. After he spoke, I asked him, “What’s the single best piece of advice you could give me as I start out my career? He answered, “This is easy. With every decision, first always do the right thing.”

Leverage your intuition. Years ago I worked for Stuart Ochiltree, former CEO of Avon. He pulled me aside at my six-month review and provided one observation: “You question your intuition too often. You’ve got great intuition but you have to allow yourself to trust it.” It was, perhaps, the best advice I’ve ever received. Using data is vital with many business decisions, but there are many times when you simply have to call it — and that’s where intuition comes into play.

Be the pacesetter. A major part of the temperature and tenacity of an organization is set by the CEO. At another early point in my career I was the VP of sales and marketing at a NYC-based startup, working for a terrific CEO, Stephen Haimowitz. More often than not, our days ended well past midnight, yet I can’t ever remember leaving the office before him. He set the pace for that entire company, and created an obsessive focus on delighting customers, which permeated —and inspired — all of us.

Ask the right questions. My first stint as a president was in my late 20s, and in year two I was prepping for due diligence on an overseas acquisition. Prior to leaving, I called my mentor and board member Paul Rohner, former CFO and treasurer of Searle (now part of Pfizer). He asked me, “Are you ready?” I replied confidently that I had four pages of questions, at which point he abruptly cut me off and said, “You don’t need four pages of questions! I’m asking if you have the right four questions.” With the combination of a fast organizational pace, limitless opportunities, and many people, thinking about the right questions is essential to success.

How is The Rate of Jobs Report

teaJob and pay growth slowed in August, returning to a more modest pace that clouds the prospects for an interest rate hike by the Federal Reserve later this month.

Employers added 151,000 jobs last month, the government said Friday. That is still a healthy number but lower than the 180,000 that analysts were expecting on average and down sharply from revised gains of 271,000 jobs in June and 275,000 in July.

Job gains in those prior two months came after very sluggish hiring in the spring and were not expected to be sustained. Fed and other economists have said about 100,000 to 125,000 new jobs a month are needed to keep pace with the population and labor force growth, and hold the unemployment rate steady.

The nation’s jobless rate in August remained at 4.9% for the third straight month. Forecasters were looking for it to drop to 4.8%.

Fed Chairwoman Janet L. Yellen last week seemed to be preparing markets for the central bank’s first rate increase since December, citing the nation’s “continued solid performance” in the labor market. But some analysts said the Labor Department report was not strong enough to push Fed policymakers to raise the benchmark interest rate at the conclusion of their two-day meeting on Sept. 21.

“I don’t think it tips the balance toward a rate hike,” said Kevin Logan, chief U.S. economist at HSBC Bank in New York.

Most experts now don’t see a modest Fed rate increase until after election day Nov. 8, at its December meeting at the earliest, but others said the report was not so bad as to cause a rethink by Yellen or the Fed.

The latest job growth “is simply not slow enough to derail a rate hike,” said Chris Rupkey, chief financial economist at MUFG Union Bank in New York.

Nor was the jobs report weak enough to help Republican candidate Donald Trump, although that didn’t stop him from issuing a statement shortly after its release and highlighting the shortcomings.

“Over a third [of the August gains] are low-paying service jobs in sectors such as retail and restaurants that won’t support a family, pay for a home or put children through college,” said Trump senior economic advisor David Malpass.

About 44,000, or 29%, of the jobs added last month were in retail and the hotel and restaurant sectors, which pay on average $13 to $15 an hour. Most of the new jobs last month were in higher-wage professional services and financial businesses and other sectors where the pay is more mixed, such as health and education services. Manufacturing and construction industries shed jobs, however.

There was no immediate comment from Trump’s opponent, Hillary Clinton, but Donna Brazile, the Democratic National Committee’s interim chair, said: “Today’s strong jobs report is further proof that Democratic leadership in the White House is the right choice to keep our economy growing.”

The economy is now in its eighth year of growth since the Great Recession, but it has been slow by historical standards. And one clear disappointment has been on the pay front. August was another letdown.

Average hourly earnings of all private-sector workers rose just three cents last month from July, to $25.73. That was up 2.4 % from a year earlier, but the weakest showing since March and down from an annual pace of 2.7% in July.

Economists have been waiting for a bigger, sturdier pickup in earnings as the job market has tightened, but the smaller-than-expected gains suggest there are many more jobless workers than the 7.85 million people on the official unemployment rolls. A long-running trend of low productivity growth and more recently, weakening corporate profits are not helping, either.

Labor Secretary Thomas Perez acknowledged that the slow wage gains have been “a big part of the angst that people feel.” Saying that “we need to put more money into people’s pockets,” he argued for an increase in the federal minimum wage, which has been stuck at $7.25 since July 2009, and substantial increases in infrastructure spending that could support higher-paying jobs.

Including the August numbers, job growth this year has slowed to an average of 181,500 a month, from 229,000 last year and 251,000 in 2014. But in an interview Friday, Perez said that was to be expected after more than six years of solid job growth in which the private sector has added some 15 million jobs.

“This economy continues to be remarkably resilient,” he said.

Still, U.S. economic growth has been particularly lackluster in the prior three quarters, with gross domestic product expanding at an annual increase of around 1%. And with the economy nearing so-called full employment — which experts regard as an unemployment rate of 4.5% to 5% — job growth was bound to decelerate after several years of solid gains.

GDP growth in the current third quarter is expected to show a big pickup, to around 3% annualized, thanks mostly to hearty consumer spending, the biggest driver of the American economy. Low gas prices have helped.

Nationally, the average retail price for regular gas was $2.24 a gallon on Monday, the lowest price a week before Labor Day since 2004, according to the U.S. Energy Information Administration.

Nonetheless, growth has been restrained by soft business investment and declining exports, reflecting weak global trade, a strong dollar and a sluggish energy industry. That has hurt employment in manufacturing and supporting sectors such as the temporary-help sector.

What is Wells Fargo CEO Roasted Says

Wells Fargo CEO John Stumpf faced down a furious panel of lawmakers Thursday as the House Financial Services Committee grilled him on his bank’s shady practices.

Representative Maxine Waters, the committee’s ranking Democrat, told Stumpf that Wells Fargo’s abuse of the public’s trust was “some of the most egregious fraud we have seen since the foreclosure crisis,” and compared it to mass identity theft.

For his part, Stumpf offered up more apologies, and said the bank planned to halt the cross-selling practices as of October 1, instead of January 1, 2017, as originally announced.

“I want to apologize for violating the trust our customers have invested in Wells Fargo,” said Stumpf. “And I want to apologize for not doing more sooner to address the causes of this unacceptable activity.”

Congress was not appeased. Representative Mick Mulvaney told Stumpf, “The damage you have done to the market and your industry far exceeds the damage you have done to your business.”

At one point, Representative Brad Sherman told Stumpf, “I don’t think you should be alone in this joyous experience,” and suggested that the heads of other big banks should join Stumpf on the Hill to explain whether they employed the same aggressive sales tactics.

“The American people need an assurance that this cross-selling mania that has affected Wells Fargo is not to be found at the other behemoth banks,” said Sherman.

Representative Ed Perlmutter even took issue with the bank’s terminology. “You don’t sell grapefruit. Why are you calling these things stores? You’re a bank.”

The scandal has cost Wells Fargo dearly: More than $20 billion has been wiped off its market value, California announced on Wednesday that it was suspending all state business with the bank for 12 months, the Labor Department said it would initiate a “top-to-bottom” review to be sure the bank hadn’t violated wage laws by failing to pay overtime to sales reps forced to meet aggressive quotas, and the SEC is considering an investigation to determine if Wells Fargo misled investors.

In addition, a group of former employees have filed a $7.2 billion lawsuit against the bank, saying they were dismissed or demoted for whistle blowing.

Wells Fargo was hit with a record $185 million fine earlier this month for opening fee-generating accounts without customers’ authorization in order to meet the high sales goals.

Wells Fargo’s independent board of directors on Tuesday rescinded Stumpf’s $41 million in stock awards and froze his salary until the investigation is complete.