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CEO Daily Brief – Jan. 5, 2010

No Snow Job: How a Leader Should Respond to Crises The nasty, late-December blizzard which blanketed New York, Newark and …

No Snow Job: How a Leader Should Respond to Crises

The nasty, late-December blizzard which blanketed New York, Newark and other communities along the Northeastern coastline showed the ever-present power of nature. It also gave a wintery lesson in how leaders should respond to a crisis.

The public expects reasonable snow removal and the media like to highlight the progress of removing all of those flakes from city streets.

So it should come as no surprise that during the last storm, New York City Mayor Michael Bloomberg raised the ire of many residents, particularly those who live in the boroughs other than Manhattan, after the mediocre job the city did in clearing the snow. Some residents even waited hours for an ambulance because the snow prevented emergency vehicles from getting through on their streets.

On the other hand, Newark Mayor Cory Booker started shoveling snow himself, helped to move stranded cars, cleared sidewalks and got diapers to a parent stuck in her home. He also used social media to report on the snowstorm to over a million followers of his Twittter messages.

Booker, according to leadership consultant John Baldoni, was a mayor in action. “The contrast between Bloomberg's reception and Booker's can serve as a lesson for anyone in a position of authority,” Baldoni writes in a blog on the Harvard Business Review website.

Here are some tips from Baldoni for top officials at other organizations, facing a crisis, based on the differing responses to the snowstorm.

  • Take a short time to determine what is occurring. Even an hour can help bring order to chaos.
  • Don’t act too quickly. The late UCLA basketball coach John Wooden once remarked, "Be quick but don't hurry."
  • Make sure stakeholders know that a speedy resolution of a crisis is not always possible.
  • Try to control the “response” to the crisis. The situation that brought the crisis may not be able to be controlled.
  • Never appear that you are losing your composure.
  • Crises can change quickly, so leaders have to change their approaches to meet with the changing situations.

Baldoni notes that even though Booker did get involved with the “heavy lifting,” there is a limit to how much of this a CEO should do in a crisis. “A senior executive's prime role is setting direction. If he or she is engaged too much in front line responsibility, then who is doing the vision thing,” he asked.

For more from John Baldoni about leading in a crisis, as reported by the Harvard Business Review, please click here.


Top Companies Run by Female CEOs Perform Well in 2010

In looking back at last year’s stock performance, two of the companies on the Dow 30, which had the largest growth in the price of their stock, are run by female CEOs.

This was the result even though only a dozen of the businesses listed as Fortune 500 companies have female CEOs, notes Fortune magazine.

At DuPont, chief executive Ellen Kullman led the company through a profitable year. She took her top post in January 2009. Fortune notes that in this short time “Kullman has reversed decades of moribund performance and dismal results.” The 48.1% increase in DuPont's shares of stock during 2010 was ranked second among the companies listed by the Dow.

Irene Rosenfeld, CEO at Kraft Foods, also led her company to a spot on the Dow for impressive stock performance. She has been Kraft's chief executive since 2006. Shares of Kraft stock increased 15.9% in 2010. In addition, Fortune notes that those investors who reinvested their dividends into the company were rewarded with a return of 20.5%.

Not every company led by a woman had such stellar results. For instance, PepsiCo, which is led by chief executive Indra Nooyi, saw a 6.4% increase in stock shares during 2010. But 2011 is expected to be a pivotal year for the company in the competitive sector.

Perhaps in future years the number of female CEOs will increase just like the price of the shares of stock at companies now run by female CEOs. Their track record so far is one that board members should notice.

For more about female CEOs, as reported by Fortune, please click here.


U.S. Auto Industry is Changing

The U.S. auto industry is changing. Auto sales in the United States increased by 11% during December. There are now seven major players, instead of the “Big Three” – Ford, GM and Chrysler – that used to dominate the market, according to a report from The Wall Street Journal. The newer four players are: Toyota, Honda, Nissan and Hyundai. With the exception of Hyundai, each of the companies has a market share of 5% or more in the U.S. auto market. Hyundai falls just under 5 percent and is growing. Toyota, which was very popular in recent years, has slipped. New models that run on electricity are being sold, such as Chevrolet’s Volt.

The Journal identified “two extraordinary shifts in 2010.” These are the “resurgence” of the American auto makers and Toyota’s drop due to a large recall and acceleration problems.

When it comes to the U.S. auto industry, the trend looks promising. The Journal reports that GM auto sales increased 8.5% in December and 7.2% for all of 2010. Ford sales went up 6.8% in December and close to 20% for all of 2010. Chrysler auto sales increased 16.4% in December and 16.5% for all of 2010.

Even though there are variables out there such as – higher gas prices – the industry appears to be headed in a good direction thanks in part to some good leadership by management. One thing to remember, though, is that many critics of the U.S. auto industry blamed much of its prior struggles on the excessive influence of labor unions or excessive regulations by the federal government. Both of these forces need to be watched carefully. Otherwise, the U.S. auto industry could stall out on its road to recovery.

For more about the U.S. auto industry, as reported by The Wall Street Journal, please click here.

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