How to quit and manage your reputation

Marshall Goldsmith has come up with interesting matrix on resignation while managing your reputation. There are four quadrants.

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Vertical axis talks about performer vs. non- performer- either you are a high performer in organisation or your performance is declining and you are in non-performer zone.

Horizontal axis talks about you resigning on your own or someone else asks you to resign.

Ideal situation is when you are a high performer and you want to quit. You can look forward to a better career, while worst situation is when you are not performing and others are aware of it and you are asked to go.

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This brings us to other two interesting situations.

You may be a high performer, yet may be asked to go. Possible reasons for this could be your superior sees you as a threat and may use office politics to ensure your exit or due to mergers and acquisitions (most of the mergers are acquisitions) your role has become surplus or redundant. You need to keep your antenna up to catch what is happening in organisation- office politics, mergers, reorganisation etc. so that you can plan your exit before you are asked to go, this will keep your self-confidence up when you quit.

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You may be a low performer and decide to resign on your own. Here while few in current organisation may be aware of your low performance, the outside market is not aware of it, you can take advantage of this time gap i.e. get another job while you are still on rolls of current organisation. But you need act swiftly, because window of opportunity will close quickly.

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Simon Bolivar, Scott Sullivan and the Labyrinth

People don’t wake up and say,” I will become criminal today”. Instead, it is often a slippery slope, and we lose footing one step at a time.
Cynthia Cooper, Vice President Internal Audit, WorldCom

Queen Pasiphae of Crete gave birth to a creature called Minotaur – it had head of bull and body of human. When Minotaur grew up it started devouring human. To keep him in control a labyrinth was designed by craftsman Daedalus and Minotaur was kept at its centre. To keep Minotaur alive, people were pushed into labyrinth, once inside it was impossible for them to get out, and ended up getting devoured by Minotaur. Minotaur was finally killed by prince Theseus.

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In real word, many successful men get trapped in labyrinth which most of the times is their own creation and so is the monster that destroys their career.

We have two such examples – one a historical figure and other from corporate world.

Nobel laureate Gabriel García Márquez wrote novel “The general in his labyrinth”. It is a fictionalized account of the last days of Simón Bolívar. Simon Bolivar was one of the greatest freedom fighters of South America who liberated South American countries from Spanish rule. He became president of Gran Colombia (consisting of 5-6 nations freed from Spanish rule). But success and his dictatorial style resulted in problems of infighting and betrayal. This coupled with declining health forced him to abandon president ship and consider migration to Europe. He began the journey to reach Santa Marta to catch ship for Europe, with few close followers. He could never leave South America; he died at Santa Marta. He got trapped in labyrinth of his own making and died.

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Another example is that of Scott Sullivan, CFO of WorldCom. Scott was brilliant finance professional and at one stage was highest paid CFO in US corporate world. Telecom companies started facing problems after dotcom bust. But Scott managed to keep WorldCom profitable. Profitable WorldCom meant Scott could justify his high salary and lavish lifestyle.

But his subordinates Betty Vinson and Troy Normand were unhappy and anxious. The profit was result of financial jugglery –  the operational cost was shown as capital expenditure i.e. line cost expenses were moved from income statement to balance sheet, which Betty and Troy were doing quarter after quarter. Fearful of losing their jobs and financial security for their families, Betty and Troy followed the orders of Scott, changed the numbers on the balance sheet and hiding the truth from the public.

Cynthia Cooper, the head of internal audit smelled a rat and started her own investigation, since she did not get much help from their external auditors-scam specialist Arthur Anderson. By the time Cynthia blew whistle, the company had lost billions, employees their jobs and shareholders their lifetime savings.

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Betty and Sullivan received prison sentences of six months and five years, respectively, and Troy received three years of probation. Scott got trapped in labyrinth and devoured by monster- both his own creation.

FQ vs. GQ…why Cuckoo Moray should have hired Robert Kiyosaki

Cuckoo Moray was famous dancer and actress of Hindi cinema. Her dances were big hit in 50s and 60s. She was highest paid dancer of that era, it is said that she had 3 cars – one for self, second for her dogs and third for her protégé Helen. She had an affluent lifestyle. Unfortunately in late 60s she got overshadowed by her protégé Helen. Though she had lot of money, she was unable to manage it and soon stopped getting any work. Cancer and poverty killed her. She was penniless when she died and no one from film industry attended her funeral.

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Unfortunately Cuckoo Moray is not the only one in film industry with richs to rags story. Others like Bharat Bhushan, Bhagwan, Vimi, Parveen Babi, and Raj Kiran too suffered same fate.

Perhaps high glamour quotient makes them blind to financial prudence, this combined with lack of financial literacy makes them easy target for fraudsters (who happen to be their close friends or relatives). They start losing money in producing films, gambling, alcohol addiction etc.

In glamour quotient versus financial quotient struggle, glamour quotient wins, resulting in poverty.
Of course, there are examples of film stars who have both- high FQ and high GQ, but then not every film star is Amitabh Bachchan.

Beware of friendly tips…ask Martha Steward

Samuel Waksel started a company called as Imclone in 1984. Imclone developed an anticancer drug called Erbitux. Successful clinical trials of this drug resulted in pharma giant Bristol-Myers Squibb buying a large stake in the Imclone in return for the rights to the drug. Due to this share price of Imclone went up. Later FDA rejected it as it was not convinced with the findings of clinical trials. This was bad news of Imclone, because announcement would result in steep fall in share price.

Martha Steward was a successful businesswoman, whose business empire dealt in areas of media, publishing and merchandising. In 1999, when her company Martha Stewart Living Omnimedia Inc went public, Martha became billionaire. She brought some shares of Imclone.

Samuel was supposed to announce rejection of Erbitux to press on 28th December 2001, till then he was not supposed to sell his shares of Imclone or inform anyone about rejection, leaking news before announcing it to press would be treated as insider trading.

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But Samuel leaked this news his friends (which included Martha) asking them to sell of their shares before news appeared in press, as post announcement shares of Imclone were bound to crash.

This friendly tip proved costly for both Samuel and Martha. They were arrested and put in jail for insider trading.

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According to the U.S. Securities and Exchange Commission (SEC), Martha avoided a loss of $45,673 by selling all 3,928 shares of her ImClone Systems stock on December 27, 2001.

For sake of just $45000, a billionaire lost her reputation and landed in jail.

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Vervet Monkey, Banker and Stupid mistake.

R. Gopalakrishnan is executive director with Tata Sons. In his book “Bonsai Manager” talks about how otherwise very intelligent managers make stupid mistakes. He gives example of Vervet monkey, which is very intelligent monkey, but somehow makes stupid mistake of climbing a tree with carcass of antelope. In its curiosity to inspect carcass, it forgets that its predatory , a leopard is also there. Leopards being cunning hunters rarely miss opportunity to hunt these monkeys.

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James McDermott was CEO of investment bank Keefe, Bruyette & Woods. James was married with two children and drawing salary of $ 4 million a year. In 1999, KBW was planning to go public and was expected to raise around $ 85 million, of which McDermott’s stake would have been $ 16 million. But public issue had to be scrapped, because James McDermott was arrested on charges of insider trading.

James McDermott was having affair with porno movie actress Kathryn B. Gannon. He told her about some mergers that were going to take place in banking industry, which his investment bank was handling. Kathryn along with her other boyfriend Anthony P. Pomponio opened a trading accounts and brought shares of banks that were involved in merger. Post-merger they sold shares and each of them made profit of around $ 80,000/-.

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James had nothing to do with these deals and did not make any money in these transactions. But his stupidity of sharing confidential information with his girlfriend cost him his job and career.

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Introvert and Leadership

In organisations “introvert” is a bad word and industry is getting built around how to help employee to get rid of introversion.

It consists of psychologists who use psychometric tests to decide your “level of introversion”, executive coaches who will help you to cope with introversion and finally, management experts who keep writing books (and then design training programs based on book!) on how to deal with introversion and make you feel good about being introvert ex. Susan Cain’s “Quiet”, Marti Laney’s ” The introvert advantage” or Jennifer Kahnweiler’s “The introverted leadership”.

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Is being an introvert a barrier in career growth? There is no empirical evidence to show that. Let us take examples from India. Top industrialists like Ratan Tata and Mukesh Ambani are introverts, yet have been highy successful leaders.

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“I would say that one of the things I wish I could do differently would be to be more outgoing. I’m a very introverted person, and pretty shy and the job I am in, I sometimes have to be more public.”
-Ratan Tata,Economic Times, 12th April 2011.

“Perhaps he has been stung by his portrayal in the media as an introvert. Maybe he is making the point that he is a tycoon in his own right.”
-Hamish McDonald on why Mukesh Ambani built Antilia.

Vijay Mallya an extrovert, is known for his flamboyant lifestyle and adventurous business streak. His venture- Kingfisher Airlines- could never make profit nor could he do much to revive it. An open letter written by women employees of Kingfisher Airlines to Vijay Mallya speaks volumes about his leadership style.

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“Why you ruined our family as well as our career by keeping us in dark, when you were not interested in serious business like airline why you kept on giving us false hopes?… Do you have any respect for women or you just believe in commodification of them for your selfish and nasty purposes.”

-Letter written to Vijay Mallya by women employees of Kingfisher Airlines.