Vineet Nayar is chief executive officer of HCL Technologies, the India-based global information technology services company, and author of Employees First, Customers Second: Turning Conventional Management Upside Down (Harvard Business Press, June 2010).
Vineet Nayar is Vice Chairman and Chief Executive Officer of HCL Technologies Ltd. (HCLT), a $4.3 billion global information technology services company and author of the highly acclaimed management book "Employees First, Customers Second: Turning Conventional Management Upside Down" (Harvard Business Press, June 2010).
In the past year, Marple, 48, has invested in energy management platform Upside; agricultural technology developer LettUs Grow; and SuperCarers, which connects professional carers with families looking for help.
This is exactly the wrong incentive structure for these banks; it will encourage reckless risk-taking and compensation programs that give management the upside in good times and, when things go badly, the downside losses are pushed onto society.
This can turn the expectations-management game upside down.
Mr. Paul is also broadly correct that the Federal Reserve has become, in part, a key mechanism through which large banks are rescued from their own folly, so that their management gets the upside when things go well and the realization of any downside risks is shoved onto other people.
"There really isn't anything wrong with there being an upside for management as long as management is not applying any smoke and mirrors here," said Bruce Elliott, the head of compensation and benefits at SHRM. "If you're going to implement this, you better be prepared to live up to it". And that, of course, is the key challenge for any company adopting such a policy.
To do this while its whole management structure is turned upside down has always been described as "extremely challenging" – management-speak for "impossible but we can't admit that to the boss".
Somewhere along the line the edifice of management had been turned upside down - it was shareholders who had become monarch, their courtiers lavishly rewarded managers whose MBA courses had taught them to manage deals and numbers, not things or people.
As we look into 2H13 we see more downside than upside: a) management's mention of 2Q slowdown in Latin America, b) pushing out of flattered volume growth in Europe due to Euro 2012, c) comments by MillerCoors that margin expansion in the next two quarter (in terms of SAB fiscal halves) will be below the 1H pace.
What it needs is a few more big contract wins and to keep meeting earnings estimates". He expects most surprises to be on the upside, given management's conservative projections.
