Lessons in Power from the Chris Christie Kerfuffle

There are numerous lessons from the Chris Christie “bridgegate” scandal for people in high-profile leadership roles. Here are a few.

Sorry, Kids, Corporate Power Hasn’t Changed

Today’s work world is increasingly populated by millennials with values presumably different from more-senior employees—more egalitarian, less competitive, more meritocratic, less accepting of hierarchy, and more tolerant of all forms of diversity. And if that’s true, surely companies are changing, which means we need new theories about power and influence to reflect these new cultural realities. Strategically expressing anger, building a power base, or eliminating rivals are considered outmoded ways of getting ahead. Certainly, the reasoning goes, in a world where reputations get created and transmitted quickly and anonymously through ubiquitous social networks, people who resort to such bad behavior will suffer swift retribution.

When Did Business School Become All About the Parties?

The discussions of the role of social class at Harvard Business School apply to all the leading business schools where, like the rest of the world, inequality in wealth has grown tremendously. But these discussions mostly miss the underlying cause of the problem: Students from all social backgrounds who gain admission to top schools all have the intellectual horsepower to effectively compete with their classmates in academics. Not all students have equal ability to compete when it comes to participating in and throwing lavish parties. Unfortunately, as the New York Times makes clear with its revelations about the ultra-wealthy members of the mysterious “Section X” at HBS, business school has become way more about the parties than about the course work, which has left poorer students at a social—and professional—disadvantage.

Why Your Employees Need to Sign Their Work

Nothing keeps a person accountable like a signature. That John Hancock still carries the same weight it did back in 1776.

When the collapse of a Bangladesh garment factory killed over 1,100 workers last month—and eight more perished in a fire at another clothing factory soon after—astonishingly, the clothing retailers tied to these tragedies claimed to know nothing at all about where their merchandise is made or under what conditions. Of course, such ignorance (along with cost savings) is one of the virtues of contracting out: You can always deny knowing anything about what your contractors or subcontractors are doing.

What’s Wrong With Big Banks? Too Many Lost Customers

As the soap opera about whether Jamie Dimon will or will not continue to hold the chairman’s role at JPMorgan Chase continues, and while there is ongoing discussion of whether banks are too big to fail, what’s missing from the conversation is much sense of the real problem at big banks—a problem that partly drives the bizarre risk-taking in the first place. That problem is losing too many high-value customers. I was reminded of this when a friend who currently does business and personal banking with Comerica asked for a recommendation because he intends to move his accounts.

Why Does Apple Care About Its Share Price?

Beset by critics and bedeviled by a declining stock price, Tim Cook, the company’s beleaguered chief executive, announced a big stock buyback and a substantial dividend increase. The market did not, however, respond by pushing up Apple’s stock price. But these actions do raise the question why Apple, which has too much cash on its books and is trying desperately to return cash to its shareholders, a company unlikely ever again to need to raise money in the public markets, should worry so much about its share price anyway?

The Reason Health Care Is So Expensive: Insurance Companies

As Congressional budget battles heat up—or roll along, depending on your time perspective—the cost of health care in America receives a lot of attention. Unfortunately most of the discussion is largely off the mark about where the preventable, unnecessary costs really are. Yes, there is certainly over treatment, particularly of people in their last days of life. Yes, doctors under a fee-for-service arrangement do have financial incentives to do too much, and the fear of malpractice can lead to overtesting and overtreatment. As the recent article in Time by Steven Brill illustrated, pricing of medical care is neither invariably transparent nor sensible. And it would certainly be nice if care were better coordinated across functional specialties.

Ray Lane, Hewlett-Packard, and the State of Corporate Governance

With the resignation of two directors and Ray Lane’s relinquishing his role of board chairman, the turmoil at the top of Hewlett-Packard, a tale of almost soap opera proportions, continues. But HP’s story is scarcely unique. Many companies make unsuccessful acquisitions, boards continue to search for corporate saviors from the outside, and few directors suffer any consequences for overseeing catastrophic problems. All this provides evidence that corporate governance remains a problem in many publicly traded companies.

Don’t Blame the Internet for the Post Office Blues

As the U.S. Postal Service, running enormous deficits, closes processing centers, sells off real estate, and inexorably counts down to the day in August when it will cease Saturday mail delivery unless Congress intervenes, its senior leaders blame the Internet, Congress, almost everything but the Postal Service itself. Ah, the well-documented tendency to blame problems on the environment and attribute success to leaders’ brilliance. But the problem with the USPS, like problems with most businesses, is inside, not outside, the organization. According to the American Customer Satisfaction Index, the USPS’s customer satisfaction is 75, well below the score for the consumer shipping industry, 82.

The American-US Airways Merger Is a Bad Idea

Endlessly repeating falsehoods won’t make them true—something that stock analysts and the press need to learn about mergers in general and airline mergers specifically. So no, the much anticipated American-US Airways merger is unlikely to be a success by any measure. That’s because, in the airline industry, as in many industries, size really does not matter for success, except possibly negatively.

Pick your preferred performance measure, and see if it shows any relationship with size.  The well-known ranking of U.S. airline performance by Brent Bowen of Purdue and Dean Headly of Wichita State listed these airlines as best in 2012: AirTran (AAI), Hawaiian (HA),Jet Blue (JBLU), Frontier (FRNT), Alaska (ALK), Delta (DAL), Southwest (LUV), U. S. Airways (LCC), Skywest (SKYW), and American (AMR). United (UAL), following its well-chronicled integration problems with Continental, ranked 12th. In general, the bigger the airline, the lower the ranking.