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Andrew Hill's challenge
The FT's management editor sets a weekly test of your business, strategy and management skills.
How do you handle a chief executive who appears to have made him or herself indispensable? That's the case with famed railroad innovator Hunter Harrison of CSX, who, as I recount in my latest column, persuaded investors to support the reimbursement of $84m of pay and benefits, even as he was hooked to an oxygen machine for an unspecified health condition. He would have quit if they had voted the other way, putting up to $11bn of stock price appreciation at risk.
This week, then, my challenge is to place yourself in the shoes of the board of CSX or, say, WPP (where the highly paid Sir Martin Sorrell has also acquired an aura of indispensability). In no more than two or three sentences, convince your star CEOs that they need to moderate their pay demands and think about succession planning. Be firm, but diplomatic — and send your ideas to firstname.lastname@example.org.
Last week's challenge was to suggest ways to manage big information technology projects better. In my column about British Airways' IT woes, I proposed adding technology experts to the board. Denis Culligan says companies should also promote business experts into the project team. "Good business-facing people see IT 'secondment' as a very bad career move," he points out. As a result, operational expertise is "provided by those the business thinks it can afford to remove from the front line, i.e., perceived poor performers — a very bad and expensive mistake."
Last week saw the chaotic outcome of a notably fact-free election campaign in the UK and Donald Trump's claim that the testimony of James Comey, the FBI chief, was discoloured by "false statements and lies" . So National Geographic's June cover story — “Why We Lie" — makes irresistible further reading. "Our ability as a society to separate truth from lies is under unprecedented threat," the article says, delving into the science of lying. Habitual liars have greater connectivity within their brains, for example, but it's not clear whether lying increases the connections, or more connections predispose people to lie.
Every week a business school professor or academic recommends useful FT articles.
Andy Lockett, dean and professor of entrepreneurship at the UK’s Warwick Business School, selects:
Foreign universities will rejoice over May’s stubborn stance Michael Skapinker makes a salient point. It bewilders many that Theresa May has not taken it on board in her refusal to take students out of the UK’s immigration figures. Our higher education sector is the envy of the world and contributes enormously to the UK economy, let alone attracting the brightest minds from around the world, who go on to build the businesses of tomorrow. Furthermore, through education we help to develop a fantastic network of contacts across the globe to promote the reputation of the UK and help UK trade – something the government is keen to foster as we face Brexit.
Facebook struggles to purge fake news The rise of fake news, and Michael Gove’s jibe that people are sick of experts, has placed an onus on universities — places full of experts — to double their efforts to inform and engage with society. I have always believed that universities have an independent voice founded on rigorous research. It is more important than ever that universities, especially academics, involve themselves in debates swirling around in the news. It is imperative that we find new ways to reach those outside of traditional media, and tap into debates happening on Facebook and Twitter to provide an independent and critical commentary on events.
MBAs must grasp that business and politics are closely linked The political landscape has changed dramatically in the years since the financial crisis, especially in the UK and US. Liberal free-market democracy has been eroded in favour of nationalism and state intervention. Business does not operate in a political vacuum. Business leaders have an important role to play in promoting international collaboration over nationalism, particularly in an age where AI and robots are predicted to threaten many jobs.
The business leaders we are producing need to be aware of how their organisations affect society. In order to do so, it is imperative that business education embraces broader societal concerns.
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