Help Wanted: CEO of the FCIC
The Wall Street Journal recently published a fascinating front-page feature story detailing how federal regulators handle the takeover of a bank which is in danger of failing. In this case, it was the tiny First Integrity Bank, in the railroad town of Staples, Minnesota, population 3,200. About 75 federal officials and contractors from the Federal Deposit Insurance Corporation (FDIC) swooped into First Integrity late on a Friday afternoon and revoked the bank’s charter in anticipation of a friendly takeover by another bank. Secrecy was paramount, to prevent panic among the locals and a run on the bank. The regulators worked through the weekend. By Monday morning the bank had been reopened with a new name, First International Bank & Trust. Depositors were assured their money was safe and went about their business, barely noticing or caring about the change.
Companies can no longer talk themselves out of a problem they've behaved themselves into. In the past, the truth got to the public sooner or later, but bad news didn’t travel as fast or hurt as much as it does today. One thing is certain: the fearsome consequences of bad publicity have stimulated many activities in companies around ethical behavior.
Exploring new approaches to business in the high-powered world of digital technology
Like a lot of people, I have decidedly mixed feelings about technology. When my PC is firing away, performing all the tricks it’s supposed to, it’s extremely easy to envision myself as a digital trailblazer, pioneering exciting new dimensions of 21st century communications and knowledge. And when my computer seizes up and grinds to a halt, frustrating those world-conquering digital ambitions, I am reminded of the perspective of newspaper columnist Dave Barry: “People in the computer industry use the word ‘user’, which to them means ‘idiot’.”
And so it was with some trepidation that this computer “user” recently accepted an invitation to discuss HOW with a group of executives from the technology industry. In my experience, tech execs tend to be smart, not afraid to challenge and holding strong opinions about what works and what doesn’t – especially in the world of business. But I figured I could hold my own.
"Say you’re sorry.”
It’s an order parents routinely give their children as a way of mending relationships damaged by a careless or thoughtless act. And centuries of experience demonstrate that the formula actually works.
Now, The New York Times reports, even the medical profession is finding advantage by leaning into our new 21st century world.
John and Nancy Cronin are principals with ipCapital Group, a consultancy that helps companies organize and capitalize on their intellectual property. HOW Online talked to them about the ways in which collaboration has changed the ways companies invent.
Earlier this month, the FAA notified Southwest Airlines that it was going to fine the company an unprecedented $10.2 million for violating safety inspection rules. Gary Kelly, the company’s CEO, immediately responded, saying the fine was unfair because his company had “acted responsibly.”
As it turned out, that wasn’t the case. In 2006 and 2007, Southwest operated 47 planes – almost 10% of its fleet – without inspecting them for fuselage cracks. The planes flew a total of 61,000 flights before they were finally grounded for inspection. Cracks were discovered in six of the planes, with some of the cracks as long as four inches.
Within a week, Mr. Kelly had apologized to customers and regulators for the company’s “poor judgment.” Three Southwest employees were placed on administrative leave, and the CEO vowed to make Southwest “the safest airline in the world.” He acknowledged “there are some that have lost trust in Southwest Airlines,” and that the company would “have to regain that trust.” Now, with several FAA inspectors alleging Southwest tried to control the inspection process, Southwest is facing a full-scale crisis – its response will dictate the sincerity of Mr. Kelly’s words.
What we love about sports, what captivates us most, is the uncertain anticipation of extraordinary human achievement. Bob Beamon’s gravity-defying long jump in Mexico City, the fulfillment of Joe Namath’s Super Bowl guarantee, the improbable triumph of the 1980 U.S. Olympic hockey team, the 2004 Boston Red Sox and Boise State’s overtime win last season all took us by surprise.
There are few things in life purer than the interaction of human will and athletic challenge. Sports epitomize that relationship and allow us to identify with often quixotic quests that have the potential to turn out heroic. The longer the odds, the more compelling the victory.
The rank-and-file aren’t the only ones affected by stupid rules.
According to BusinessWeek (February 25, 2008), the new employment contract between investment firm Lazard and Bruce Wasserstein, its CEO, has one of the most far-reaching non-disparagement agreements in recent memory.
Forbes.com recently developed a report on K-12 education as part of their “On Solutions” series. A wide variety of people, including myself, were asked to write a short opinion piece about things that might be done to fix the education system in America.
Over the last few months, the subprime mortgage crisis has grown to become one of the biggest problems in our economy. As we look over this crisis, its short-term impact is apparent: massive write-downs in the banking industry, a drop in home values and a slowdown in new construction, just to begin with. And as we look down the road, it is clear that this crisis will be with us for some time to come.
Had the mortgage industry been driven by a different set of values – had financial institutions been thinking in terms of should instead of could -- the story might have turned out differently.
Companies can no longer talk themselves out of a problem they've behaved themselves into. In the past, the truth got to the public sooner or later, but bad news didn’t travel as fast or hurt as much as it does today. One thing is certain: the fearsome consequences of bad publicity have stimulated many activities in companies around ethical behavior.
The Wall Street Journal recently published a summary of the events of 2007, as chronicled throughout the year on the paper’s front pages. The Journal did a good job of detailing the course of the year, and as I read over the list, I wondered what last year’s events — the accounting fraud, overpaid executives, insider trading and ethical violations – tell us?
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Author Sam Horn shares her story:
"One of the finest examples of 'HOW in action' I’ve been privileged to witness happened last November at Chicago’s famous Soldier Field."
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