You Too Can Be Jeff Skilling

…or at least try out your mad management skills with a computer game designed to teach leaders about ethics and decision making.

The company’s first product, “Virtual Leader,” simulates a series of company meetings in which the player has to manage a complex network of interpersonal relationships in a work setting. Players are scored based on how well they complete business goals while maintaining relations with customers and co-workers.

I realize that I might be in the minority here, but that, to me, sounds awesome. I would play that all day if somebody let me. I’d play it till the motherboard screamed. I would own that game like Siegfried owns Roy.

The game is based on a “Three-to-One” theory, in which successful leadership depends on effectively managing power and workplace tensions while encouraging a proliferation of ideas. Aldrich says it’s a system that could have benefited some of the latest poster children for corporate malfeasance.

That has nothing to do with Jeff Skilling because Jeff Skilling is an angel who ran his business the way all businesses should be run: ethically and totally awesomely.

Three-to-One is inherently an ethical strategy,” Aldrich said. “We’ve built in a number of ethical choices in the game, and in each case, doing the sleazy thing will come back to bite you…You can try to manipulate the press for example–only show them the undamaged part of your plant–but the truth will come out.”

Oh God. I want this for Christmas.

If you were a midlevel accountant who saw bad things happening at (disgraced accounting giant Arthur) Andersen and you knew Three-to-One, you’d have a more effective approach to dealing with those issues,” Aldrich said. “There were people who knew things were going wrong, but they didn’t have the skills to bring those issues to light.”

Thou shalt not besmirch Arthur Andersen!

Something as seemingly innocent as an employee twiddling a pen can be a vital clue about whether the tension level in the workplace has skipped out of the “productive” zone. The game gives the player a safe way to try different approaches to dealing with other personalities.

A productive zone. A twiddling pen. I’m so there. I AM THERE.

Eminem & The Solid Truth

I’ve always liked Eminem but recently I’ve been stone cold crazy about him, especially his 8 Mile stuff. That movie was special to me; the music was matched only by the quality of his acting. A few critics gave him the praise he deserved, some even mentioned his name for an Academy Award that year, but for the most part he was (egregiously) ignored. Completely predictable; he’s a rapper for heaven’s sake, we don’t give out Oscars to just anyone, you know. But the music was his bravest yet. All that Slim Shady stuff – the silly pop cultural stuff, with jabs about Britney Spears and his male English teacher wanting to have sex with him in junior high – was gone, replaced by some honest, justifiable rage.

Eminemis noted for his honesty in his music, his ability to throw down the truth and let you stumble through it or ignore it. As I was listening to Cleaning Out My Closetfor the 800th time in the past two days, I realized that he’s the only person who has legitimately pulled off rage rock. Usually emotions and the bitterness one feels when things don’t work out is women’s domain. Alanis Morisette, for instance, is widely considered the founder of the anti-male music movement – the one female voice who could rise above the others and sing does she go down on you in the theatre with any conviction at all. But to my mind, Ani Difrancois the best hurt woman in America. She’ll wrench you like nobody can wrench, because she’s so obviously been wrenched. Her lyrics can be bold or vulnerable, but you always get the feeling she’s speaking the truth about her experiences. When she dared to say, fuck you, and your untouchable face, she said it in this incredibly beautiful soft way, like she’d say, you’re stealing the covers The fact that she was able to throw it away so casually – but so meaningfully – is meaningful. Women can be mad – barely – in music, but they can’t actually go so far as to say fuck you in a way that describes anger. Instead, it must describe pain.

I’ve said before that women in our culture must suffer if they are to be respected, and while our culture will tolerate a woman being hurt, and murmuring fuck youafter the man has shut the door and left her alone, we generally can’t countenance a woman screaming an honest fuck you in anger to the world, even when the world sorely deserves it.

Both Difranco and Morrisset are women, and they’re singing about men and that’s where their rage lies, and every “radical” female artist now start there: with men. Ladder by Jane Osbourne is creepy and rageful, and we accept it because she’s talking about a man:

I’m standing here in your closet.
Unbuttoning all your clothes.
I’ll sleep in your bed tonight,
but I never find you home.
You’re giving me crooked answers.
I’m cracking your little code.
I’m learning another language,
so full it’s about to explode.

You gave me a ladder now.
I surely believe I’ll climb.
It don’t even matter now.
I’m willing to take my time.
I’m gonna love you anyway,
today and everyday, today and everyday.

This woman is out of control. But if she were talking this passionately about the fact that her mother didn’t love her enough, or the fact that the public school system failed her, would we be as willing to listen? Would her emotions be as justified? Or do we like the song because it’s about familiar territory: men, the one place women are permitted to take leave of their senses?

Eminem goes bigger, broader; he’s talking about life. He says fuck you to his mother, his career, his poverty. And he’s mean:

how dare you try to take what you didn’t help me to get,
you selfish bitch, I hope you fuckin’ burn in hell for this shit
remember when Ronnie died and you said you wished it was me
well guess what, I am dead, dead to you as can be

I can’t think of a single woman, or any other artist, who can get away with singing that. Many artists shout angry lyrics into the mic, but Eminemis the only one I truly believe. His truth is solid, he is as much himself as the beach is the beach. No pretense at all. And some of the stuff that makes him uniquely him is often ugly, but he manages to make it something catchy, something we want to hear. He’s talented as a hip hop artist, but he’s also smart enough to not try and lie to the people who are listening to him: he’s not 50 Cent walking around talking about being shot. He doesn’t call himself a thug. He shows that while he was once on his way to being a thug, he got his shit together and is now a responsible father who just happens to sing about a really miserable childhood, a life growing up on the wrong side of 8 Mile. I like that he honors his past that way. I like that he does it in a way that reaches people.

But mostly, you know, I just really like the result: the music.

Starbucks Bucks Rumors, Flops Around In Search Of Revenue

Starbucks has a page on their website devoted to airing out some pesky rumors and then setting the record straight. So far, there are only two rumors – one from January 11, 2005 (updated December 2006) titled, “Misinformation About Starbucks and the United States Military”. The next one is August 03, 2006 regarding “Misinformation on Israeli Armed Forces Support.”

I find this a little unnerving. If you’re going to spin, spin. Spin currently. The fact that they gave up after two rumors – a year apart – tells me they have no flipping idea what people are saying about them. Right now, Starbucks would be well-served to talk about the fact that shops are closing all over the USA and Australia, and the 1,000 jobs dropped from payroll.

But Starbucks has deeper problems than merely keeping head’s up on the rumormill.

According to an 8-K filed today, their third quarter growth is average, and they’re struggling to keep revenues level and have “revised” their expectations for next year. Earnings per share for the quarter was $0.01, compared to EPS of $0.21 per share earned in the prior year period. And those closed shops are especially troublesome because the majority of them (1,432) were opened in late 2007. What has changed so dramatically that they are now being shuttered?

In their latest 10-K filing, Starbucks declares risk factors for their company. One of them is “Starbucks is highly dependent on the financial performance of its United States operating segment.” But according to the 8-K, things aren’t as great as they could be in the USA either: “Declining economic conditions as reflected in reduced traffic and, to a lesser extent, increased cost pressures have continued to negatively impact the current operating environment.”

Let me be clear: one could do much worse than invest in Starbucks. Though the stock is down today, you’re not going to “net-net” [a little Jeff Skilling lingo there] lose your shirt investing in coffee. But Starbucks is no longer a cash factory. Leadership seems a little uncertain about what to do as Starbucks loses market share. But my secret suspicion is that there is nothing they can do. If customers realize that a gallon of gas costs about as much as a cup of coffee, my instinct is that the petrol will win, every time.

My Favorite CEOs

1. Dick Fuld, Lehman Brothers. I listened to the second quarter earnings statement again today and just loved how he was all over it, not making an excuses for the performance, saying numerous times, “this is my responsibility.” He was emphatic, and he sounded as blown away by the decline in value as his investors felt. Triple A plus.

2. Steve Jobs, Apple. Apple’s continued success is directly related to Jobs leadership. The results issued on July 21 were great: the Company posted revenue of $7.46 billion and net quarterly profit of $1.07 billion, or $1.19 per diluted share. Last year’s second quarter results were $5.41 billion and net quarterly profit of $818 million, or $.92 per diluted share. He’s managed to keep money rolling in, even though Apple has had a few stinkers that nobody’s payingn much attention to (AppleTV and the new iPhone.)

3. Rex Tillerson, ExxonMobil. Exxon Mobil made history in February of 08 when it reported the highest quarterly and annual profits ever for a U.S. company. Their fourth-quarter net income rose 14% to $11.66 billion, or $2.13 per share. The company earned $10.25 billion, or $1.76 per share, in previous year-ago period. Obviously, the man is doing something right.

4. Larry Kellner, Continental Airlines. The fact that he’s slashing his own salary means nothing to me, but I’m sure his employees appreciate the gesture. And he’s always out there, giving interviews – I seem to hear from him a lot more than other CEOs. He’s approachable and hardworking, good qualities to have in a CEO.

The Other Side

 

This Never Happened

Suppose one balmy summer evening, a person you know, maybe someone in another state, with an agenda, left her home and drove into the canyons of downtown. Suppose, hypothetically, that until she actually saw it, she didn’t know that she had come all this way, in the dead of night for it, but seeing it gleaming across a black chiffon sky answered some secret need inside herself. Suppose she parked her car and stood on the sidewalk across the street, pondering the beauty of it, the square yellow lights, the rounded curves, the enormous investment of steal and glass, and its beauty, we assume, called to her, as surely as a lover’s voice whispering her name. It called her close. She moved rapturously across the street to the building so it loomed over, holding her in its thrall. We can assume that she was not content to merely stand there, dumb and awed by the beauty of the building which now belonged to her, as surely as a lover belonged to her. And surely only a lover could entrance her so. Workers busy in the lobby looked like ants. Not because she was far above them, but because she was so near them, she knew what they were doing. They were eating away the beauty of the place, she instantly hated them. Their mean little mission. But she was smart, our hypothetical girl. She realized they couldn’t stop their mission, but they could pause for a moment, just a moment so she could accept the fact of it.

She walked along the length of the building, not hiding from them. Friendly and open, her arms swinging so they could see the camera in her palm. A guy came out, Mexican, tired. It was late and his shirt was soaked with sweat. A decision was made. She would be the hapless, happy tourist, someone just in town for the night and trying to get some sight-seeing in after dinner. The Mexican looked at the girl, and the girl smiled. “Hi!”

“Hola.”

“Can I, um, take a picture?”

“A pit-chr?”

The girl held up the camera. “A picture? Photo?”

He shrugs helplessly. The glass doors are flung open, the door of the lobby, and she moves toward it with him. “It’s late,” she says, “have you been working all day?”

“All day.”

“Wow, you guys work hard. Can I just step here and take a picture?”

“I don’t know.”

“I’ll just stand here,” she said, stepping into the lobby, which was full of scaffolding and lumber and all kinds of construction things she did not understand. “I’ll stand here and take a picture of the scaffolding. It’s so neat looking.”

“Scaffole.”

“Scaffolding,” she says and points to the metal structures that look like things found in children’s playgrounds. Monkey bars.

He nods and walks away, and suddenly she realizes she’s inside the building. All alone. With a camera.

The elevators were right in front of her. Floors 29-50. The fiftieth floor – the special floor, the floor she loves more than any other floor because that’s the floor he worked on, the floor he occupied for years and years. His ghost is up there, she knows it, and she walks as if in a trance to the elevator, steps inside, and presses the button for Floor 50.

Hypothetically, this event took place in Texas, where throwing confetti on Mardi Gras is a hangable offence, so our story must end here lest we say too much. But hypothetically, we can assume it was a very fulfilling experience for our hypothetical heroine. We can assume, in this hypothetical scenario, she came home, and fell into bed, her heart happy for the first time in many days, the images of her hero dancing behind her closed and peaceful eyes.

 

 

Lehman Brothers Declares Q3 Dividend

Lehman issued a press release yesterday announcing a regular dividend of $0.17 per share of common stock for the third quarter of the 2008 fiscal year.

Cute.

Salary Slashing CEOs

JetBlue’s chief executive agreed to halve his salary on Monday in a show of solidarity with employees as the low-cost carrier struggles with soaring fuel prices and a slowing U.S. economy.  David Barger is to have his base salary cut to $250,000 from $500,000. The cut only applies for the six months from July through December, according to a regulatory filing.

Earlier this year, Continental Chairman and CEO Larry Kellner and President Jeff Smisek said they will forgo their salaries for the rest of 2008.

Midwest Air Group Inc. CEO Timothy Hoeksema had a pay cut of 40 percent as part of a restructuring aimed at keeping the airline operator in business and out of bankruptcy. It is unclear if the cut was voluntary. In addition to his salary cut, senior vice presidents took a 25 percent reduction in total pay, corporate officers, 17 percent, and directors and senior managers 11 percent.

High fuel prices and layoffs (particularly at Continental) have created unfavorable market conditions for normal airline operations. Other businesses, however, such as banking which is also being slaughtered in the marketplace, have not been as sensitive to high executive compensation. John Thain of Merrill Lynch, for instance, continues on track to earn $18 million in salary this year.

I would be shocked (and a little disappointed) if oil and gas executives slashed their own compensation but luckily it does not appear that will be the case.

Fannie Mae and Freddie Mac CEOs are under heavy pressure to get by with less, but so far there have been no indications they will. Ditto for car makers.

It appears that airline CEOs are alone in this venture. Good for them. I don’t think it makes a bit of difference to anyone, but if it makes them feel good, have at it.

Merrill Races For The Bottom With Another Write-Down of $5.7Billion

Less than two weeks after announcing write-downs of $9.7 billion, Merrill Lynch was hit with some more bad news today when its stock plunged 12 percent to $24.33. The brokerage said it will record $5.7 billion of pretax writedowns in the third quarter because of additional losses on the sale of collateralized debt obligations (ie, mortgages.) In a statement released today, the bank said that it plans to raise $8.5 billion by selling shares in a public offering.

The write-downs will likely push the company into yet another quarterly loss if revenues remain weak.

The company has lost about $19.2 billion in the last year. Merrill has taken write-downs of more than $45 billion on mortgage assets that the bank once pursued with vigor.

Cuil v. Google

As of this moment, Google has nothing to worry about with the new Cuil search, launched by former Google employees. It’s slow, awkward [there is no place to hit “next”, you just have to click on the page you want of the returned page numbers], and the “info” page isn’t up yet. It’s got an interesting layout – three columns, with pictures and text. It’ll be interesting to see if it can capture some of Google’s market share at all.

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