Macy’s Pushes Execs In The Wrong Direction
March 27, 2009 4 Comments
Macy’s announced that it will be tying executive compensation to the performance of the company’s stock price over the next three years. That’s an interesting approach given this recent advice from Jack Welch:
On the face of it, shareholder value is the dumbest idea in the world. Shareholder value is a result, not a strategy… Your main constituencies are your employees, your customers and your products.
If I were one of Macy’s shareholders, I’d rather have the execs focused a little less on the stock price and a little more on employees and customers. Maybe they should tie executive compensation to Forrester’s Customer Experience Index. Macy’s ended up tied for 15th place out of the 25 retailers we examined; well behind other department stores like Kohl’s and JCPenney.
Rather than following an outdated management approach, I suggest that Macy’s execs download my free book: “The 6 New Management Imperatives: Leadership Skills For A Radically Changed Business Environment.” In it they will find 6 alternative places to focus their energy:
- Invest in culture as a corporate asset
- Make listening an enterprisewide skill
- Turn innovation into a continuous process
- Provide a clear and compelling purpose
- Extend and enhance the digital fabric
- Practice good social citizenship
The bottom line: Isn’t it time for new management thinking?
About Bruce Temkin
Bruce,
This gets at the heart of the trend over the last few decades to focus on outputs rather than inputs. It’s interesting to watch leaders examine the revenue and the stock price almost daily and rarely address the things that are driving it, or not, like culture, customer focus, and employee engagement. I often ask executives after they tell me about their strategic plan, to tell me about their culture plan. As you can imagine, those don’t routinely exist. Great post.
Randy: Thanks for the comment. I couldn’t agree more! And I’d like to see execs with culture plans; that would definitely be progress.
It is amazing to me that in 2009, with so many tragic examples of the stock price tail wagging the corporate dog into oblivion, a corporation could actually proliferate such a policy.
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