Harvard Business Review - 2013.01,02.pdf

The Worlds Top CEOWhen Amazon went public,in 1997,CEO Jeff Bezos wrote a letter to shareholders that outlined his central mission:“Its all about the long term.”Fifteen years later,Bezoss online retailing giant has added$111 billion in market cap and continues to disrupt its rivals.And still Ama-zon feels like a company that is playing a long game.Bezoss continuing achievement has won him accoladeshe was Times Person of the Year in 1999 and Fortunes Businessperson of the Year in 2012.And now,in the most comprehensive and objective ranking weve ever seen of global CEOs performance,Bezos emerges as the worlds number one living CEO.(Only the late Steve Jobs had a better record.)The list,compiled by Morten Hansen,Herminia Ibarra,and Urs Peyer,is not based on reputation,popularity,or anecdotal evidence of accomplishment.Its based on hard data.And its all about the long term:It measures CEOs perfor-mance over their entire tenure.(For the Top 100 list and an explanation of the methodology,turn to page 81.)I spoke with Bezos on Cyber MondayNovember 26during what turned out to be the biggest online shopping day in history and the best sales day ever for Amazons Kindle devices.He reiterated his farsighted focus,even though it has occasionally caused him to fall out of favor with Wall Street.“If youre long-term oriented,”he said,“customer interests and shareholder interests are aligned.In the short term,thats not always the case.”(For the full interview,see page 83.)So kudos to Jeff Bezos.And to Hansen,Ibarra,and Peyer,who crunched the numbers on more than 3,000 CEOs around the world to compile this remark-able list.Adi Ignatius,Editor in ChiefPhotograPhy:EliE honEinhbr.org10 harvard business reviewJanuaryFebruary 2013From the EditorThe authors principle of the dual operat-ing system is well intentioned but may suff er an agency problem in execution.If the“volunteer army”is comprised mostly of middle and lower management,the company might not be able to rely on people to continue signing up without some form of reward or incentive.These managers are taking on responsibilities formerly assigned to the highest levelsand succeeding wildly at it.Appealing to their emotions may help raise an army,but it may not keep them around.David Lengacher,principal and fellow,Concurrent Technologies CorporationKotter responds:A very reasonable ques-tion.All I can off er is what we have found.Our fi rst client has been at this for about seven years and they are still getting plenty of volunteers.The article doesnt give the reader much information about how to implement such a structure in his or her organization.The“principles”are really desirable outcomesoutputs rather than inputs.David K.Hurst,management speaker,writer,and educator Change requires creativity,yet the article emphasizes the reverse.Getting“buy-in”and focusing on“pragmatic goals”con-tributes to incremental change,at best.Communication does not guarantee buy-in(aka compliance).The suggested“guiding coalition”drives groupthink and dimin-ishes creativity.Kotters recommendations would drive us toward the acceleration trap.Pragmatic goals would keep us in the zone of the status quo.Gary Carini,professor of strategy,and Mark Dunn,professor of marketing,Baylor Universitys Hankamer School of BusinessI have seen very few examples of success-ful nonhierarchical organizations,and there are reasons for that.Even in nature,hierarchy is an eff ective communica-tion network,where a message from the center can reliably and accurately reach the edges(although communication in the other direction is generally not as reliable).However,by involving every level over a period of time,Kotters method provides new ideas time to incubate,spread,and take hold.It is much easier to change HBR article by John P.Kotter,November 2012In todays turbulent business climate,traditional hierarchies simply cannot survive.The answer,says change expert John Kotter,is to add a second,strategy-focused operating system to the one that handles predictable day-to-day business.The new system would complement the old,and because it would be an agile network,it would free up the hierarchy to get more work done so that the entire business can continuously adapt.Leading Change When Disruption Is the NormWhat You Can Learn from Family BusinessHBR article by Nicolas Kachaner,George Stalk,and Alain Bloch,November 2012Why is it that family-owned companies have slightly lower earnings in good economic times,but they outperform their peers during downturns?The answer may lie in their focus on resilience rather than short-term performance.Its fascinating that the latest research cel-ebrates family business instead of pointing out its pitfalls.People hear“family busi-ness”and think of mom-and-pop stores,even though there are many large,family-run companies that tell another story.Andrea Rubinfeld,cofounder,Family FoundedWe need to shift businesses and share-holders focus to the long term.Dawna MacLean,change agent,Dawna MacLean