By Andrea Estey
Freeman served as CEO of Quest Diagnostics from 1996-2004
Many business leaders are criticized for fixating on short-term goals at the expense of long-term performance. So which global CEOs actually delivered solid results over the long run? The 2013 Harvard Business Review‘s CEO Scorecard provided an objective answer to this question, and named Allen Questrom Professor and Dean Kenneth W. Freeman the 76th best-performing CEO in the world.
Dean Freeman served as Chief Executive Officer of Quest Diagnostics Incorporated from 1996-2004. He also appeared on HBR‘s first CEO Scorecard in 2010, where he was ranked 67th in the world. This year, the pool of CEOs studied increased by roughly one-third, from 1,999 in 2010 to 3,143 this year, due to the inclusion of additional emerging-market indexes.
According to Harvard Business Review, the goal of the CEO Scorecard is to shine a spotlight on the CEOs worldwide who created long-term value for their companies, and to give executives critical benchmarks they could aim for. The top 100 CEOs on the list performed exceptionally well, delivering on average a total shareholder return of 1,385% during their tenures and increasing their firms’ market value by $40.2 billion.
HBR‘s 2013 CEO Scorecard assesses the long-term performance of each CEO, from the first day on the job to the last, by looking at how much total shareholder returns changed over that time period (adjusting for country and industry effects). While Dean Freeman served as CEO of Quest Diagnostics, the leading provider of medical diagnostic testing services, total shareholder return was 1,014% (country adjusted), or 1,102% (industry adjusted).
During his tenure at Quest Diagnostics, Dean Freeman executed a dramatic financial turnaround by establishing industry leadership, effecting expansion through acquisition, and driving organic growth. Quest Diagnostics provided the third highest five-year shareholder returns among the Fortune 500 (1999-2003), and in 2004 was named to the Bloomberg Businessweek 50. The company’s market capitalization increased from approximately $350 million at the time of its spinoff from predecessor company Corning Clinical Laboratories in 1996 to more than $9 billion. Read more about Dean Freeman’s professional background.
The list’s top 5 CEOs are Steve Jobs (Apple), Jeffrey P. Bezos (Amazon.com), Yun Jong-Yong (Samsung Electronics), Roger Agnelli (Vale), and John C. Martin (Gilead Sciences). See the complete list on HBR.org.
Group of MBA students traveling to Sao Paulo, Belo Horizonte, and Rio De Janeiro
As part of the annual Brazil Field Seminar trip, a group of MBA students, led by Kristen McCormack, executive-in-residence, senior lecturer, and director of the Public & Nonprofit Management Program, is traveling around the country for two weeks this January to learn firsthand about issues of sustainability, social impact, and entrepreneurship. The group is also blogging daily from Brazil about their experience.
Thus far, the 2013 trip has included several unique company visits, including Cargill’s Food Innovation Center in Sao Paulo (Cargill is the largest privately held company in Brazil) and Estre, the largest and fastest growing waste management company in Brazil. The group also had an inspiring meeting with three microcredit clients, and spoke with former President of Brazil Fernando Henrique Cardoso.
Of the meeting with the former President, student Ben writes:
On Brazil’s current leadership, President Cardoso offered his opinion on current President Dilma Rousseff and her predecessor President Lula De Silva, both of whom are members of the opposition party, the more liberal workers party. President Cardoso is a supporter of business and believes that the current leadership is intervening too much. He described the popular Lula as a “pragmatic leader, who is flexible in his principles.” When asked what makes a great leader, President Cardoso said that what the world needs for great change are giants, and what makes a giant is not someone who imposes his will on the people but rather someone who can persuade others to agree.
We asked if he was pleased with his own accomplishments and with the future potential of Brazil. He said “We are making progress…my son and daughter will live better than myself.” He explained that Brazil truly can be a super power, with relatively strong growth, high exports, and huge economic potential, but the focus now needs to change from that quantity to quality: “Look at Denmark, it has a low GDP but a high quality of life.”
His final piece of advice, and my personal favorite quote of the meeting was: ”Be flexible in your behavior and be consistent in your principles.”
Pictured above is the 2013 Brazil Field Seminar group with Cargill staff at Cargill’s Food Innovation Center in Sao Paulo. Photo via the Brazil Field Seminar blog.
On January 10, Jacqueline J. and Arthur S. Bahr Professor of Management Michael Salinger‘s piece “Why the FTC Was Right Not to Sue Google” was featured in the Forbes Leadership Forum on Forbes.com. Salinger, a professor in the Markets, Public Policy & Law department, is a former Director of the Bureau of Economics at the United States Federal Trade Commission.
January 3 should go down as one of the most important and proudest moments in the history of United States antitrust enforcement. After a 19-month inquiry, the Federal Trade Commission announced that it had voted unanimously to close its investigation into the design of Google’s search results. The FTC’s decision is a victory for Google, a defeat for those who tried to persuade the FTC to use the antitrust laws to hinder rather than promote competition, and a victory for Google users. It is not easy for a law enforcement agency to devote substantial resources to an investigation and then not bring a case, but sound antitrust enforcement dictates that it must do so when, as happened here, the investigation failed to uncover evidence of a violation.
To understand what was at stake in the case, go to Google and enter a query for “New York weather.” The top result will say “Weather for New York, NY,” with a minimal four-day forecast that may be sufficient for some users. Just below that will be links to sites that provide more detailed weather information. To the extent that users find the information provided directly by Google to be sufficient, weather sites might get less traffic. But Google users are better off, and that is the key point. As FTC Chairman Jon Leibowitz explained about the FTC’s decision, the antitrust laws are supposed to protect competition, not individual competitors. And, far from being an antitrust violation, improving search results to get users the information they need is precisely the sort of competition the antitrust laws are supposed to encourage.
Read Salinger’s full piece on Forbes.com.
Banner image courtesy of flickr user Robert Scoble.
From MIT Sloan Management Review‘s Innovation Issue
In the Winter 2013 “Innovation” issue of MIT Sloan Management Review, Senior Associate Dean, Professor in Organizational Behavior, and Everett W. Lord Distinguished Faculty Scholar Karen Golden-Biddle explores a new approach to organizational transformation and meaningful change:
Too often, conventional approaches to organizational transformation resemble the Big Bang theory. Change occurs all at once, on a large scale and often in response to crisis. These approaches assume that people need to be jolted out of complacency to embrace new ideas and practices. To make that happen, senior management creates a sense of urgency or takes dramatic action to trigger change. Frequently, the jolt comes from a new CEO eager to put his or her stamp on the organization. Yet we know from a great deal of experience that Big Bang transformation attempts often fail, fostering employee discontent and producing mediocre solutions with little lasting impact.
But meaningful change need not happen this way. Instead of undertaking a risky, large-scale makeover, organizations can seed transformation by collectively uncovering “everyday disconnects” — the disparities between our expectations about how work is carried out and how it actually is. The discovery of such disconnects encourages people to think about how the work might be done differently. Continuously pursuing these smaller-scale changes — and then weaving them together — offers a practical middle path between large-scale transformation and small-scale pilot projects that run the risk of producing too little too late.
Researchers tend to overlook this option because few managers have employed it until recently, assuming they needed to take an all (Big Bang) or small (pilot projects sequestered away from the dominant organizational culture) approach to organization change. That may have been more true in the past when organization boundaries were less malleable, communication more difficult and people less mobile. However, today’s complex and connected global environment makes step-by-step transformation by managers inside most organizations a real possibility…
Banner photo courtesy of flickr user Yogesh Mhatre.
On November 26, two top executives from the Boston area health sector discussed the innovative models their organizations have developed to meet consumer needs more effectively while containing cost. The event was part of the School’s Health Sector Speaker Series.
The discussion with featured executives Andrew Sussman, MD, President of CVS Minute Clinic, and Ralph de la Torre, MD, President and CEO of Steward Healthcare was moderated by Allen Questrom Professor and Dean Ken Freeman. The discussion was followed by a Q&A session and a networking reception with faculty, staff, alumni, and student attendees.
On December 7, 2012, Howard Scheck (BSBA’85), chief accountant of the Enforcement Division at the U.S. Securities and Exchange Commission, spoke to a group of undergraduate and graduate accounting students at the School. The two-hour discussion focused on the responsibilities of the SEC and their efforts to protect investors. Ana Albuquerque, assistant professor of accounting, organized the visit.
Pictured above is Scheck.
Associate Professor and Dean’s Research Fellow gives advice in BU Today about the most common shopper mistakes and how to avoid them
Excerpts from BU Today:
The future of the economy may be uncertain, but money woes appear not to have dampened the spirits of holiday shoppers. Spending over the four-day weekend following Thanksgiving, including Black Friday and Cyber Monday, reached $59 billion, a 13 percent increase over last year, according to the National Retail Federation. The organization predicts that holiday sales will jump 4 percent over last year’s number, to $586 billion.
What does it all mean? Why do people spend more when they may have less? How can shoppers get the biggest bang for their buck? BU Today spoke with Barbara Bickart, a School of Management associate professor of marketing and a Dean’s Research Fellow, about common holiday shopping pitfalls, why we spend irrationally this time of year, whether we should feel guilty about buying for ourselves, and why we should buy the same gift for everyone on our holiday list.
What are some common mistakes shoppers make during the holidays?
The real issue is being tempted by deals that are right in front of you that seem too good to resist and look like they’re going to go away tomorrow. The retailers do a really good job of trying to convey that this is a limited time offer, that it’s a very precious, valuable, scarce deal, and that there are only so many of these available. So people think, I’ve got to act now.
How can we avoid these pitfalls?
One thing is having a list and knowing exactly what you’re going to get. And if you’re going to get things for yourself, know what those are too, because you’re probably going to be more impulsive for yourself than you are for others.
Another thing is not to go shopping when you’re tired or depleted, because as we make many decisions, we start to become more depleted and then we become more inclined to be impulsive. If you go shopping at a time when it’s not so busy or when you can be energetic, that’s going to help you avoid making those impulsive decisions. A shopping marathon is not a good idea. Do a little bit at a time and maybe do it on a Tuesday night when the stores aren’t so crowded.
See all of Associate Professor Bickart’s tips on BU Today.
Photo by Flickr user ThomasOfNorway.