Is Your CEO Willing To Have a Cut in Pay?

September 27th, 2009 by admin

Here are the 10 largest (by revenue) U.S. public companies where CEO pay cuts took place:

General Motors (reduced to $1)
Ford Motor (reduced by 30%)
Sears (reduced by $50K)
FedEx (reduced by 20%)
American Express (reduced by 10%)
Motorola (reduced by 25%)
Eaton (reduced by 6 weeks’ worth of pay)
Continental Airlines (reduced to $0 for Q3 and Q4 of 2008)
EMC (reduced by 15%)
Cummins (reduced by 10%)

In this economy, it may require a cut in pay to remain strong or have a business to survive. Are you or is your CEO willing to take a cut in pay?

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What McDonald’s Can Teach Us About Financial Recovery

July 28th, 2009 by admin

I believe there are four important lessons that can be learned from the remarkable turnaround at McDonald’s.

1. How you grow matters as much as that you grow. The financial services industry would have benefitted from a focus on “growth by quality, not by quantity.” Clearly, the “growth at any cost” credo of some led to exactly that: any cost.

2. Changing your business model may not be needed, but belief in it is. Start by asking yourself what business you are in and whether customers still have a need for it. If they do, commit to it — fully. At McDonald’s, we knew that people still “deserved a break today” and we were willing to let go of all other initiatives (many of them very exciting) in order to demonstrate unwavering commitment to the core business.

3. None of us is as good as all of us. It’s the system, stupid! Understanding that you are leading a system, not a company or a person, is a critical insight if you want to successfully change something large. McDonald’s is extremely good at this. To some people (me included), it is a frustrating process. It takes time. It requires buy-in and plenty of patience and tolerance from everyone. It also requires adequate policing, oversight and incredibly detailed measurement systems. This is tedious work, and intimidating to those being measured. But it’s needed.

Large systems work best with a hard-wired operating system in the hub that enables innovation, entrepreneurship and decision-making in the nodes. The Internet would not have happened without HTML. Our country would not have prospered without the U.S. Constitution. But it is worth all the pain. And it must start with the humility that you are in the service of something larger than your own institution. As we say at BE-CAUSE — the company I founded — a purpose bigger than your product.

4. Plan your work, and work your plan. At McDonald’s we created a “plan to win.” Some would argue that it wasn’t perfect. Perhaps it wasn’t, but we decided that it was. And we haven’t looked back. Even through tragic circumstances — losing two CEOs in less than one year due to tragic deaths — the plan stayed intact and is still central today to the focus and alignment of the organization.

Information as per http://blogs.harvardbusiness.org/cs/2009/07/what_mcdonalds_can_teach_us_ab.html?cm_mmc=npv-_-TOPICEMAIL-_-JUL_2009-_-STRATEGY2

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