Category: Ask Harry
How should companies deal with activist investors?
When a company first becomes aware that an activist investor is purchasing their stock, the first reaction on the part of the company is often to be very defensive and prepare for battle.
As you would expect from me, my first reaction is to approach the situation very differently â that is, with a balanced perspective.
Letâs first start with some background. What is shareholder activism? In an excellent article from the Boston University Law Review, âReasonable Investor(s),â Tom Lin of Temple University explains that shareholder activism is a form of activism in which shareholders use equity stakes in a corporation to put pressure on management to achieve a higher stock price.
Okay, so stop and think about the goal of an activist investor. They have capital to invest and are focused on generating a return for their investors. Hmmmm, sounds pretty similar to the goal of company management, the board, and the company shareholders. đ€
Read MoreThe right — and responsibilities — of ‘free speech’
I often have discussions with students and colleagues about the critical importance of âfree speechâ in a strong democracy. For example, I believe the ability of the media to challenge, debate, and disagree with government leaders is absolutely essential. In contrast, look at the inability of anyone to question leadership in a dictatorship or communist government.
However, as you would guess knowing my fanatical focus on always seeking a âbalanced perspective,â the key question is whether the right to free speech carries any responsibilities?
Some argue that if you place any constraints on free speech, can you say itâs really âfree?â Others would argue that that is an extreme position which does not allow for some âreasonableâ exceptions. But who defines the exceptions? For example, should it be okay to yell âfireâ in a crowded building? Many would argue no, that would be wrong and illegal.
Okay, check the box if it is illegal. The question I then ask myself is: Are there other areas that should be an exception to âfree speech?â Here is where my focus on values-based leadership impacts how I address the issue of the responsibility that comes with âfree speech.â
Read MoreWhy is providing feedback a moral responsibility?
I spend a lot of time in my Kellogg leadership classes and in my leadership seminars to executives explaining the importance of providing feedback.
While most people will nod in agreement, I believe many do not realize what providing feedback really means. I recently asked an executive if he provided his team with feedback, and he stated, âAbsolutely! I sit down with each person once a year and complete the feedback form from Human Resources.â Completing a form from Human Resources once a year has nothing to do with providing feedback. I define feedback as âopen, honest, continuous, and transparent.â If someone works for me, there is nothing we will discuss on that once a year form that we havenât discussed multiple times.
Read MoreWhy do companies make so many big mistakes?
I am often asked by Kellogg students and executives during my leadership talks âWhy do companies make so many BIG mistakes?â Since it happens so often, it is a very fair question.
Simply look at the WSJ, NYT, or FT and almost daily you will find a story about a company blunder and think to yourself: âThe company did what?!?!â or âHow and why did that happen???âđ€
The usual quick guess as to why it happens is, âWell, itâs simple. The CEO just made a mistake.â However, take a minute to reflect on this issue. The answer is not that easy. First of all, remember, the CEO usually has an executive management team of at least 10-12 people. So how did they all let the mistake happen? Wasnât there anyone on the team capable of stepping up and stopping the mistake from occurring?
Well, I believe there are two major contributors to the problem: One is the process by which the CEO makes decisions, and the other is how the senior team defines their roles.
Read MoreShould I Stay or Should I Go?
My goal is to make myself available to address questions from my Kellogg students and executives on any topics that they would like to discuss. I constantly remind myself that if it were not for attending Kellogg, I would not have had the opportunities I have enjoyed during the last 40 years.
However, I always remind students that I have very few answers, but many opinions. Said another way, rather than Q&A, I do Q&O.
One of the most frequent questions I get is, âHow do I decide whether to stay in my current position or seek an opportunity in another organization?â
Read MoreWhatâs the benefit of attending a weekly religious service?
I am often asked why I attend a religious service at least once a week (usually Sundays). Some ask if it is just the requirement of being Catholic. Others wonder if itâs really a good use of time and what do I get out of it?
In my case, I donât view it as a requirement. I also donât view it as just a question of what I get out of it. Rather, I think about it as what Iâm putting into it. In the crazy world we all live in, I find it remarkably helpful to take a short time out of a busy schedule and ask the questions I think about very often:
What are my values?
What is my purpose?
What really matters?
Why is the value of a college education declining in America?
Much has been written in the last several years regarding the declining value of a college education. According to Gallup, the percentage of Americans who expressed confidence in higher education fell from 57% to 36%. A recent article in the New York Times, âWhy Americans have lost faith in the value of collegeâ states that ânearly half of parents say they would prefer not to send their children to a four-year college after high school…. 2/3 of high school students think they will be just fine without a college degree.”
This perspective is significantly different from the previous 50 years. As stated in the NYT article âBetween 1965 and 2011, university enrollment increased nearly fourfold to 21 million.â
So the obvious question is: Why is the value of a college education declining in America?
Read MoreIs it lonely and stressful at the top?
Given my experience as a former CFO, CEO, and Chairman of Baxter International, a global healthcare company, as well as my ongoing chairmanship of multiple company boards, I am often asked by my Kellogg MBA students and Kellogg Executive seminar participants: âHarry, is it true that it is lonely and stressful at the top of organizations?â My opinion is that yes, it can be lonely and stressful at the top, but it definitely does not have to be. Let me explain.
Read MoreAsk Harry #14: Why is your teaching focused on values-based leadership?
Given my extensive background in finance, which includes a stint as the Chief Financial Officer (CFO) of Baxter International, and my general love for economics and numbers, I am often asked why I choose to focus most of my classes at Kellogg on values-based leadership and not something more quantitative and finance-based. To be honest, while I do love finance and economics, I feel that I have a real calling to have a small positive impact on the next generation of future leaders around the world. I strongly believe the world would be much better off if we had more values-based leaders. While I am overall an optimistic person, I am very concerned that we currently have a severe lack of values-based leaders in all areas of global society, including government, business, sports, and even religious institutions.
Read MoreAsk Harry #13: When Company Values are at Odds with Personal Values
My Kellogg students and participants in the Allen Center executive programs will often ask me, âHarry, I have read all three of your books, and I strongly agree with your values-based leadership principles. However, the values and culture of my company are totally at odds with my values. What do you recommend I do?â
Read MoreAsk Harry #12: How can I reduce the level of frustration in my job?
I often get asked by students and executives in my classes and leadership talks: âHarry, how can I reduce the level of FRUSTRATION in my job?â
Even if you enjoy your job and your career is going well, there are times when you will get frustrated. After reflecting on times that I personally have gotten frustrated, I realized that the usual cause of my frustration was that I made assumptions. I ASSUMED that what I was asking someone or the team to do was clear and that they had agreed to do it. AHHHH, that was the mistake! (Remember the saying about assumptions? I probably shouldnât include it in a post, but it isnât good đ).
Ask Harry #11: If your boss undermines the trust in your working relationship, should you confront him?
Ask Harry #11: If your boss undermines the trust in your working relationship, should you confront him?
This question was sent to me by a student who experienced this situation recently. It reflects a theme I encounter frequently in my discussions with my part time Kellogg MBA students who work fulltime and take classes in the evening, as well as the Kellogg EMBA students who fly in for weekend classes. For these students, these questions are not a theoretical exercise; they are trying to apply the leadership concepts in my classes to actual decisions in the real world.
