800-CEO-READ Excerpts

Herb's Hints - Part IX

7: The Early Bird Really Does Get the Worm

Most of the successful people I know are already awake at six a.m.Not all, but most. Say what you will, but getting up early has been proven in studies to be a basic characteristic found in successful people. I don’t want to get nasty letters from all of you who don’t get up until ten and still have thriving, profitable businesses, so I’ll add that there are exceptions to every rule.

My own rule, however, is to get up in the dark and go home in the dark. While everyone else is still sleeping I find I can get a lot done, because once the office and the world come alive, your time is taken up with meetings and interruptions. Before normal hours is my best work time. When regular starting hours come around, that’s my people time. I want to give as much time as I can to employees and outside meetings, and to do that I need to be in as early as possible to get the other things done.

I’m in the office at five a.m., Arizona time, and I’ll take that time to watch the opening of the market, organize, and catch up on emails so that I’ve got answers by eight in the morning. I putter around and clear my head, and as it gets later I’ll walk through the building and find people to talk to. I have breakfast every morning with our chief financial officer and our special assistant to the CEO, and we talk about important issues for the day. I’ve got a routine, but it always starts early. I believe that the early bird gets the worm. Live your business life by the clock and you’ll be far more productive.

These seven principles have never let me down. They’ve been a road map that I’ve followed consistently.

Herb's Hints - Part VIII

6: Know When to Walk Away

This rule is simple, but it helps keep you focused on transparency. Know when to walk away from a situation, and remember that life’s too short. You have to know when to say no. This is a skill that a lot of younger executives have a hard time with. But if you practice saying no and turning down opportunities that don’t seem like positive ones for you and your company, you’ll get better and better at it. It’s simple: if you’re involved in something that just doesn’t feel right, cut the cord and walk away. Turn around early, at the first scent of trouble. Trust yourself and your gut instincts enough to know when to draw a line in the sand. I

I’ve applied this rule many times in my career, and I’ve learned that sometimes you’re forced to walk away from deals or people that at one time seemed attractive. And maybe they were at one point, but then it changed. That’s part of anticipating and understanding when terms aren’t good for you anymore. Sometimes you may be faced with having to walk away from employees who continually let you down or threaten your business, or from partnerships or investments that might be too good to be true. We faced this here at the Dial Corporation when the bankers started calling us to invest in Playtex, a company that makes sippy cups, feminine-hygiene products, and suntan lotion, among other things. The margins in most of their businesses looked good, but the business just didn’t fit with our acquisition criteria. We took a close look at the business and passed on it; but later they came back to us with a more attractive proposal, and then we found ourselves faced with a dilemma. The dilemma was that the deal was attractive to the point that we found ourselves wondering if perhaps we should stretch the criteria we had established. That’s called nonstrategic compromise, and ultimately we had the sense to walk away. We decided there was no way we could set outside our defined criteria, and that the deal, as good as it might be, was probably too good to be true. As it turns out, the company wasn’t sold, but more importantly, the numbers just weren’t right for us because they wouldn’t have come close to the criteria we set to achieve success. The moral of the story? Know when to walk away.

Herb's Hints - Part VII

5: Knowledge Is Power

This rule might seem obvious, but a lot of people think they can get by on what they already know, even as things are growing and changing right in front of them.

This rule is why I spend three hours every Saturday at a Wal-Mart. I do it because I can gain a whole lot of knowledge about consumers and what they’re buying, and it’s a simple way to see for myself who’s buying our product, as well as who’s buying our competitors’. It gives me a perspective on the marketplace at the world’s largest retailer, and it shows me what’s going on with our competitors’ products, and what’s new and exciting in the world of merchandising. When I travel, I like to visit stores as part of my normal out-of-town routine. I don’t have to rely on a sales report, or a monthly update to tell me what’s going on. I can see it for myself. Knowledge is power. Always try to know more than the other guy.

Herb's Hints - Part VI

4: Don’t Fall Victim to the Popularity Contest

Popularity contests are nice, but they’re no way to run a business. A lot of leaders fall prey to the desire to be popular by letting bad results slide in order to remain well liked. They think, “Don’t get tough, people won’t like you.” That kind of thought process might win you friends, but you won’t keep them for long when you’re in the CEO ejection seat. There has to be substance behind your strategy, and your strategy can’t only be about making people like you. This was a change I had to make halfway through my business career.

I’ve seen colleagues of mine make dumb decisions based on their need to be liked. Mostly it comes in the form of giving poor performance one more chance—like letting key executives consistently arrive late for meetings. It shows disrespect for others’ time. Now I just lock the door! Make no mistake about it. If you let mediocrity continue and strive to be liked at the expense of being a good leader, it will disrupt the objectivity and momentum of the organization. When a CEO fails to act, and fails to show personal strength and fortitude, he or she begins to lose credibility. You have to remember that you can’t please all of the people all of the time. Don’t try.

I lived through this at Dial when we made a business decision to shut down one of our two employee cafeterias and turn it into a fitness center. There were a lot of employees who wanted a more balanced life, and the idea of an on-site fitness center excited them. They could have lunch in the cafeteria in one building, and then walk over to the other building to work out in the fitness center when they wanted to. In the building with the fitness center we planned to have employee refrigerators so they could bring their own lunch if they wanted to, in addition to high-quality vending machines, and even a delivery service for food. We did an employee survey and the response was overwhelmingly in support of the fitness center. Yet when we shut down the one cafeteria to make room for the fitness center, we got a lot of employee complaints! We had hit a crossroads. It seemed like no matter what decision we made, someone was going to be upset.

At that point I suppose I could have tried to make everyone happy, by deciding to have two cafeterias and a fitness center, or two fitness centers, but neither would have been practical, affordable, or realistic. In the end we made the best business decision for all employees, by having one cafeteria and one workout center. Not two workout centers and not two cafeterias. One of each, where they had a choice to eat, or workout, or both! You can’t please everyone all of the time, so you just have to do the best you can and forget about the popularity contest.

Herb's Hints - Part V

3: Marketing Is the World

This rule always helps me remember one of the most important components of success for a company. And since running a company is what I’ve been doing for a large part of my career, I include this rule in my list to make sure it’s always at the front of my mind. Outstanding marketing is what most often brings business growth and consumer loyalty, as well as increasing a company’s brand recognition, making consumers aware, interested, and excited about a product. A great brand, when marketed well, is the Holy Grail of business—a lasting source of pride and profits; it’s the driving force that makes your product sing. However, ineffective marketing or poor product quality can send a brand into a death spiral, causing it to disappear into the marketing graveyard.

Marketing is important because the brand lives in the mind of the customer, creating a feeling tied to an image. The man who buys Ralph Lauren for it’s stature and solid feeling, the aspiring athlete who wants Adidas on his feet when he plays soccer, the housewife and amateur chef who shops at Williams-Sonoma for elegant, high-quality products, or the family who buys Dial soap for its antibacterial protection. The brand creates an impression in the mind of the consumer, drawing them into the world that is your company. Brand marketing is essential in the world of consumer products. The brand perception, whatever it may be, reflects on the leader of the company as well, and vice versa. Marketing is everything. It rules the world.

Herb's Hints - Part IV

2: Tell It Like It Is, Even if It Hurts

Good executives tell it like it is. They know that transparency can hurt, and they’re not afraid of the discomfort that sometimes comes along with it. They’ve got courage, and they understand that great things can only be achieved through honesty, openness, and with ethics.

This rule is simple. If you made a mistake or you think you’ve gone in the wrong direction, admit it—and sleep better at night. This is as easy as it sounds, though it isn’t for the weak of heart. The ability to fess up is a trait that every great, transparent leader possesses. It’s harder to tell it like it is than it is to avoid the truth, but even when you avoid the truth, you’re not fooling as many people as you think.

Pete Rose avoided the truth for a lot of years by denying that he had ever bet on baseball. But how many people really believed that he hadn’t? All signs pointed in that direction, and in the end, after many years of denial, and an undoubtedly tumultuous internal struggle, he finally admitted the truth. He had bet on baseball, and he had lied about it for years. He finally came clean, but by then it was too late. He should have fessed up sooner.

Herb's Hints - Part III

1: Surround Yourself with People Who Challenge You

The last thing a leader needs is someone who always says “yes” to his or her ideas. Encourage people to challenge you openly, in public, and any way they want to; but if you have to challenge one of your employees, do the opposite. Do it in private so you don’t embarrass them or dissuade others from challenging you. The worst kind of a leader is one who dresses someone down in front of everyone to set an example for all to see. That’s just bad form, and it’s not good management style, for a CEO or any executive.

At Dial we’ve got a section on our employee survey titled “Fear and Retribution,” where people answer questions about whether or not they feel empowered to contribute and grow in the organization without fear of being criticized. The answers are important, because it’s just another way we can make sure our environment remains transparent. We want to measure how employees feelabout how open their environment is, and we want to encourage innovation without people having to worry about criticism. But it’s not as easy as it sounds. You won’t see much creativity unless you search out employees who anticipate and think differently than you do. If all you hire are people who are just like you, you won’t get much in the way of ideas that are different from, or better than, your own.

Herb's Hints - Part II

HERB’S HINTS: A ROAD TO A BETTER BUSINESS LIFE

Everyone has their own way of doing things, and I’m no different. The following seven principles are truths that have guided me through my career, and helped me achieve my goals. You may like some of them and you may not like others, but they’ve all worked for me.

This plan is something I refer to as my Road to a Better Business Life, and it’s helped me in the process of turning around some of America’s greatest companies. My plan isn’t based on years of surveying business leaders about their innermost thoughts, and there aren’t any charts or graphs to back it up. I’m not a business consultant, nor a management guru, and I’m not even a celebrity CEO who’s likely to appear on the cover of Fortune. But I do have more than twenty years of leadership under my belt, and these are the seven basic principles that have worked for me.

ROAD TO A BETTER BUSINESS LIFE

1. Surround Yourself with People Who Challenge You
2. Tell It Like It Is, Even if It Hurts
3. Marketing Is the World
4. Don’t Fall Victim to the Popularity Contest
5. Knowledge Is Power
6. Know When to Walk Away
7. The Early Bird Really Does Get the Worm

Herb's Hints - Part I

The Transparent Leader: How to Build a Great Company Through Straight Talk, Openness, and Accountability
by Herb Baum with Tammy Kling
HarperBusiness - October 2004
235 Pages - ISBN 0060565470

I recommend this book to anyone and you can read the review written by John Moore here.

I pulled this excerpt from the Appendix of the book. I know that may sound a little odd, but I thought this was really good. In this section titled "Herb's Hints: A Road to a Better Business Life", Baum gives his advice for how to have a successful career in business.