Our President Kevin Brinegar discusses the book, “The Coming Jobs War” (by Jim Clifton of Gallup). He relays that there is a global shortage of 1.8 billion good jobs.
Our President Kevin Brinegar discusses the book, “The Coming Jobs War” (by Jim Clifton of Gallup). He relays that there is a global shortage of 1.8 billion good jobs.
A pair of European researchers have some very interesting soon-to-be-published findings on CEOs and the value of prior experience. Interesting, because contrary to popular belief and custom, they believe prior experience may not be a good thing.
Not sure I agree with the “CEO experience trap,” but check out their reasoning.
Companies are more likely to hire prior CEOs because they are increasingly unwilling to take the risk of hiring executives with no previous job-specific experience. But according to a new study by Burak Koyuncu of NEOMA Business School and Monika Hamori of IE Business School, prior CEOs performed worse than their peers without such experience.
In their paper “Experience matters? The Impact of Prior CEO Experience on Firm Performance” – forthcoming in Human Resource Management journal – Koyuncu and Hamori collected data on the career histories of the CEOs of S&P 500 corporations who occupied the CEO post from 2005. Tracking their performances for up to three years after their appointment, the researchers found that 19.6% had at least one prior CEO job and that those who transitioned directly from a prior to a new CEO job showed 48% lower three-year average post-succession returns on assets. In contrast, CEOs who spent time working in a different position between CEO jobs showed no significant difference in performance than CEOs without prior experience.
“Our research suggests that the job-specific experience these CEOs gained in their prior CEO job interferes with their performance in their new job,” said Koyuncu. “Their job-specific experience may slow down learning because some knowledge and techniques need to be “unlearned” before learning in the new context can take place.”
Also, as prior CEOs rely on experience from past events, they are more likely to follow decision-making shortcuts which may cause them to give the same answer to a different problem. “Prior CEOs may be too embedded in the norms, culture and routines of one organization and thus may underperform in another because they have developed fixed assumptions about how tasks should be done,” said Koyuncu.
In order to avoid such an “experience trap”, the authors recommend that hiring companies put CEOs with prior experience in an interim position for at least a year before they take on the full CEO role.
“In general, companies that hire CEOs with prior CEO experience need to provide ample support to their transition and integration – the greater the opportunity for acculturation, the greater the chance the company can avoid falling into the CEO experience trap,” said Koyuncu.
A University of Michigan business professor explores cheating in the workplace. He says pay disparity among lower-income may be a key factor in unethical behavior.
A summary of his commentary:
People are more likely to cheat when the potential rewards are high — that’s a well-known axiom. But new research by Scott Rick of the Ross School for Business shows there’s potential for cheating even when the rewards are low.
A series of experiments in his new paper suggests that dishonesty among low-paid workers increases if they find out others are getting paid more for the same work. Low pay rates alone aren’t enough to trigger cheating, Rick says. It’s the upward comparison that makes it more likely low-paid employees might cheat.
The finding has important implications for managers, since low-stakes cheating creates billions in annual losses for businesses. Rick’s paper, “Cheating More for Less: Upward Social Comparisons Motivate the Poorly Compensated to Cheat” was co-authored with Leslie K. John of Harvard Business School and George Loewenstein of Carnegie Mellon University, and is scheduled to appear in the journal Organizational Behavior and Human Decision Processes.
“We all know that economic gain is an important driver for unethical behavior,” says Rick, assistant professor of marketing. “We wanted to look at psychological motivations that may be at odds with basic cost/benefit reasoning. We know people can become out of sorts about salary differences, especially if they seem unjustified. But nobody had experimentally examined whether that could lead to misbehavior.”
Rick and his co-authors ran two experiments to probe that open question. In the first, subjects received either 5 cents or 25 cents for each self-reported correct response on a list of questions. Some participants knew about the different pay rates while others did not.
When pay rates were public, those paid 5 cents per correct answer cheated more often than those paid 25 cents, despite the lower economic incentive. When the pay disparity was kept private, those paid 25 cents cheated slightly more.
Another experiment created two groups — one where low-paid subjects were told there were others in the room earning more, and one where low-paid subjects were told there was a higher pay rate, but that everyone in their session would be paid the same.
Cheating was higher in the group where low-paid subjects were in the same room as higher-paid ones. There was little cheating among the lower-paid subjects when they were told everyone in the room was being paid the same lower rate.
“A low wage, in and of itself, doesn’t stimulate cheating,” Rick says. “However, awareness that others around you are earning more for the same work does encourage cheating. These upward social comparisons matter in a way that standard economic theory would not predict. But the psychology of workplace motivation is much richer than simply what you yourself earn.”
Rick says companies should consider managing differences in wages for similar work or, when possible, trying to keep the information private.
“It’s hard to say what the optimal balance is, because flat salaries will make it difficult to attract and retain the very best employees. But there are ways to compensate people privately, which don’t show up in a base salary, such as incentive bonuses,” says Rick.
The research also may explain why wealthy people cheat for seemingly trivial gains. When the wealthy can easily compare themselves to other similar people who earn even more, they also may be more prone to cheating.
It’s way too early for this, but I can’t help myself. Hillary Clinton and Chris Christie appear to be favorites as nominees for the 2016 election, and NBC News reports on a recent poll showing Clinton had the edge thus far. She also appears to benefit from more cohesive support from her party than Christie, as Tea Partiers don’t seem to be enthusiastic about the Springsteen-loving East Coaster.
Christie vs. Clinton
Christie’s challenges extend beyond his own party: The poll finds Clinton getting the support of 44 percent of all adults in a hypothetical match up against the New Jersey governor, who gets 34 percent. The rest of respondents either preferred another candidate, said they would not vote, or were undecided.
And while Election Day 2016 is still more than 1,000 days away, the survey shows Clinton benefiting from the same demographic trends that helped propel President Barack Obama to win the election in 2008 and re-election in 2012.
Clinton leads Christie among African Americans (83 percent to 4 percent), respondents ages 18 to 29 (45 percent to 31 percent) and Latinos (44 percent to 33 percent).
Clinton also holds the advantage with residents from the Northeast (52 percent to 35 percent), West (43 percent to 30 percent), the South (43 percent to 35 percent) and Midwest (41 percent to 37 percent). And she has a narrow edge among independents (39 percent to 35 percent).
Christie, meanwhile, leads among whites (41 percent to 37 percent), seniors (44 percent to 41 percent) and respondents with an annual income of $75,000 or more (46 percent to 34 percent).
If you haven’t been to the Benjamin Harrison Home in downtown Indianapolis, you should check it out. This is where Harrison lived when he won the 1888 election in a year that proved to be quite monumental for the city and state. And here are some interesting facts from the Harrison Home’s November 2013 newsletter, “The Car-O-Line.”
Statistics of 1888 Election
Over 1,500 folks participated in last night's Annual Awards Dinner, and the central theme was to honor Indiana's contribution to the U.S. military. It was an enjoyable, yet humbling evening. I'd like to thank my coworkers for putting on another memorable event. The keynote from Gen. Stan McChrystal was enlightening, and here is some information about the award winners:
Business Leader of the Year: Steve Ferguson, chairman of Cook Group, Inc., Bloomington – “Steve Ferguson is a class act and has a thoughtful and calming way about him. He is a perpetual optimist and has a good way of getting people to focus on the right things, the task at hand and getting it done,” offers Indiana Chamber President and CEO Kevin Brinegar. “I think we all should aspire to be like Steve in terms of his approach to business and in particular his approach to interpersonal interactions.”
An attorney by trade, Ferguson was a Cook Group consultant for more than two decades before finally being persuaded to make the partnership official in the early 1990s. He was company founder Bill Cook’s confidante and trusted advisor (Cook passed away in 2011).
Today, the Cook Group (which also includes enterprises in the retail, real estate and travel/transportation industries) employs 11,000, has annual sales of approximately $2 billion and generates more than a million medical device products each day.
The importance of what the core company does hits home daily, Ferguson says.
“We see those stories – a child who is surviving, a parent who lives to see his grandchildren. I would think everybody in the company, whether they are on the floor manufacturing or in leadership, realizes that every device is going to affect somebody’s life.”
Another Cook legacy that Ferguson has been heavily involved with is building restoration. Ferguson led the affiliate responsible for these projects, which began locally in Bloomington in the 1970s. The crowning jewel would come in 2007 with the return to glory of the West Baden Hotel and creation of the French Lick Resort.
“It’s an impact project. There’s a lot of involvement in the bricks and mortar, and I think we’ve done a very nice job there. But it’s much more than that. To bring it back to life and to have people visit there and enjoy it, which was one of the things Bill always wanted.”
Ferguson spends three workdays at Cook headquarters in Bloomington and two at the French Lick Resort. He listens to those running the day-day-day operations and imparts his wisdom without telling them what to do. It’s all done with a positive attitude that he finds so important.
“I think you need to be around positive people and you need to be a positive person yourself. If someone asks how I am, I always say ‘I couldn’t be better.’ I get up every day feeling like that,” shares the 72-year-old.
A welcome activity for Ferguson is volunteering and community involvement, which he believes is something everybody should embrace. One such effort that remains near and dear to his heart is the 800 basketball games he coached. Other highlights: He served 12 years on the IU Board of Trustees and was a member of the state’s Higher Education Commission and Indiana’s Education Roundtable.
Government Leader of the Year: former U.S Sen. Richard Lugar – “Few government leaders have made as wide and positive an impact as Richard Lugar has for his home state and nation,” offers Brinegar. “In fact, ‘Government Leader of a Lifetime’ might well be a more appropriate designation.” Lugar was also the inaugural Government Leader of the Year in 1990.
After two terms as Indianapolis mayor, Lugar represented Indiana for 36 years in the U.S. Senate.
During his time in the Senate, Lugar was known for his bipartisanship and thoughtful approach to various complex issues – including the dismantling of weapons of mass destruction. As a testament to these traits and his many accomplishments, Lugar is one of the recipients of this year’s Presidential Medal of Freedom – the nation’s highest civilian honor presented to those who have made especially meritorious contributions to U.S. security or national interests.
The 81-year-old Lugar hasn’t slowed down after leaving Congress. As president of the Lugar Center in Washington D.C., he continues his work on many of the same passions that dominated his career, including energy and national security issues. Recent diplomacy efforts included trips to South Korea, Azerbaijan and Montenegro.
“(Energy) is still politically charged; the battle over the Keystone XL pipeline seems to go on and on and on. Many people take the point of view that climate change requires that all fossil fuels be curtailed. I’m optimistic – balance of payments are down, production in the United States is up and our foreign policy has changed because of much less dependence upon the Middle East and other areas that are hostile to us,” Lugar explains.
Regarding money matters, he has confidence Americans can find solutions to the many challenges.
“My hope is that there is going to be more optimism. We are in a degree of economic recovery, even if not as strong as all of us wish it was, that compared to other countries … we are still the strongest and are recognized that way. The dollar is still the best currency; this is where the Chinese want to put their reserves,” he emphasizes.
Lugar has also expanded his relationship with the University of Indianapolis to form the Lugar Academy, which provides students with unique learning experiences here and in Washington. Lugar also teaches university students in Indiana and at Georgetown University.
When he’s not helping to prepare the next generation of business and civic leaders, you might find Lugar on the 604-acre Marion County family farm that he still manages today, planting and pruning trees with his son, Bob. Family is especially important to Lugar; he met longtime wife, Charlene, when the two served as co-presidents of the Denison University student body.
“We have continued to be supportive of each other through all the public life ups and downs and the raising of four wonderful sons, who I have enormous pride in and have great achievements of their own. These have been critical factors in my ability to serve. My family has wanted to be teammates in this and I’ve included them,” he adds.
Community of the Year: Bedford – “A community that adapts to changing industries and citizen needs is one that will succeed,” states Brinegar. “To see Bedford thrive and capitalize on partnerships at all levels to support its businesses and residents is heartening. The community sets a wonderful example.”
Bedford’s comprehensive plan (which hadn’t been updated in 25 years) centers on strategic investment and downtown revitalization. The city honed in on expanding education and workforce development efforts; diversifying and continuing to support growing industries, including health care and defense manufacturing; plus beautifying buildings and offering affordable housing for seniors.
Strengthened partnerships among the city, county and private sector paved the way for the community to focus on the high unemployment rate that was burdening the small city of 14,000 in south central Indiana.
Bedford's progress was recognized by the state earlier this year, as it was chosen as a Stellar Community. Only two Indiana communities are designated as such each year. The award brings $19 million in state, local and private funds to Bedford for planned improvements.
The awards dinner followed the Indiana Chamber’s fall board of directors and annual membership meetings. Indiana Chamber Volunteers of the Year were announced during a lunch ceremony: Ron Christian (Vectren, Evansville); Mike Campbell (recently retired from Neace Lukens, Indianapolis); and Melissa Proffitt Reese (Ice Miller, Indianapolis).
Patty Prosser, managing partner of Career Consultants – Oi Partners, of Indianapolis, was elected the Indiana Chamber’s 2014 chair of the board of directors.
RECENT INDIANA CHAMBER ANNUAL AWARD WINNERS:
Business Leader of the Year
Scott Dorsey – 2012
Jean Wojtowicz – 2011
Mike Wells – 2010
John Swisher – 2009
Tony George – 2008
Community of the Year
Indianapolis – 2012
Kokomo – 2011
Terre Haute – 2010
Valparaiso – 2009
Noblesville – 2008
Government Leader of the Year
Sen. Carlin Yoder and Rep. Jerry Torr – 2012
Speaker of the House Brian Bosma and Senate President Pro Tem David Long – 2011
Tony Bennett, state superintendent of public instruction – 2010
Stan Jones, former state commissioner for higher education – 2009
Former Gov. Joe Kernan and Chief Justice of the Indiana Supreme Court Randall Shepard – 2008
Two interesting numbers, courtesy of the folks at Governing magazine:
For the past 12 years, the Indiana Youth Institute (IYI) has hosted the largest gathering of youth workers and educators in the Midwest. The Because Kids Count Conference is a two-day, first-class conference experience packed with educational workshops, nationally recognized speakers, a resource tradeshow and amazing networking opportunities.
Academy Award-winning actor and UNESCO Goodwill Ambassador for Peace and Reconciliation Forest Whitaker will be the keynote speaker. Furthermore, Ready Indiana Executive Director Kris Deckard will be serving on a panel about the Technical Honors Diploma and workforce credentials/industry certifications.
We hope you'll join us in Indianapolis!
Uh-oh. It’s holiday season in the Skrzycki household! Bring on classic movies ("Rudolph," I love you), presents (I embrace my reputation as a Scotch tape fanatic) and goodies (where do I begin?).
Employees who earn a spot on Santa’s “naughty list,” however, can spoil all the fun – especially for human resources professionals. Check out this article, 12 Days of Christmas: HR Headaches, and you’ll see why.
Here are a few excerpts:
Twelve Online Shoppers
Cyber Monday is the biggest day of the year for online shopping. Although some employees shop on their lunch break or at home, many take time out of the work day to cross items off their Christmas list. Solution: Remind employees that some down time is inevitable, but work time is still for work.
Eleven Fantasy Footballers
Wasting time at work is not an art enjoyed exclusively by shoppers. The holiday season is also football season, and that means fantasy players will be out in full force. Solution: See above.
Ten Office Party Drunks
Some folks continue to believe that getting intoxicated in front of your boss is a good idea (hint – it is not). Solution: Limit the number of drinks at office parties and arrange for safe transportation if needed.
Sound familiar? Sound off on your experiences and don’t forget to respond to our blog poll about holiday online shopping.
I ran across an interesting IndustryWeek list recently. Titled "Around for the Long Haul," it included prominent manufacturing firms founded 100 years ago or more. Bet you didn't know these companies have been around this long.
You will find a few Indiana connections, past and present. The partial list: