Tuesday, May 5, 2009

10 lessons from Sandra Moose - BCG Consultant and Long-Time Verizon Director

Here are ten great tidbits from Sandra Moose, who came to MIT Sloan to give a talk on the 2003 FiOS go or no go decision that Verizon had to make.  Moose talked about the role of a Fortune 50 director, and how they specifically add value.  

Directors need to adjust the way they think about business – Verizon does network build outs that don’t see payback for 12 to 15 years.  That’s a hard concept for directors from more traditional business that expect paybacks within five years.  You really need directors who are able to grasp that.

With technology investments, there must be a discernible difference in quality – It’s faster?  It’s better?  Who cares?  The customer has to notice a discernible difference in an attribute they value for your technology investment to be worth it.

Look to the balance sheet to understand how agile your competitors can be – Verizon knew their cable competitors wouldn’t make investments in comparable technology which would take away FiOS’ differentiation.  The reason was that cable companies are typically thinly capitalized and can’t make large investments like the $22 billion one FiOS was and is.

Boards make business model decisions – Typically, board members who add value understand business models as opposed to the details of the technology.  Moose gave Lou Gerstner as an example.  Gerstner was not a technologist having come from McKinsey and American Express, but he understood the technology enough to build strong business models around the innovations.  Use sub-committees to understand and validate the details of the technology.

Don’t be afraid to ask dumb questions – If you don’t know the answers, chances are others on the board don’t.

Build credibility by dissenting – Dissent when you think it is right and put it down in paper.  

It’s different on non-profit boards – On non-profit boards on which Moose serves, there are people who only care about specific causes.  And it’s hard to manage this.  There needs to business people who will help run these organizations in a way that is sustainable.  

A nice way of describing a Director – Sandy called a good Director a “loyal critic”.  I liked that.

The dissenter’s gunnysack – If you do dissent without knowing what you are talking about, be aware that you may get “gunnysacked”.  This means that they’ll FedEx you a massive amount of information for you to review.

CEOs are getting too busy to serve on multiple boards – With Sarbanes-Oxley and other regulations increasing, CEOs are more focused on their own companies now.  Furthermore, with the major incidents like Enron and WorldCom that have occurred, and Director’s liability, being a Director has become more time intensive.  

Sandra Moose Biography (from BusinessWeek)

Dr. Sandra O. Moose is the Senior Advisor at The Boston Consulting Group. She joined the firm in 1968, and has been a Director since 1975, and was a Senior Vice President until 2004. Her experience before 1968 was with the Federal Deposit Insurance Corporation, with the Federal Reserve Bank of Boston, and as a Member of the faculty of Harvard University. Prior to this, she was a Senior Vice President from 1989 to 2003 and appointed Chairman of the East Coast. Dr. Moose joined the company in 1968. She serves as the Member of Board of Trustees at Natixis Funds. She also serves as the Presiding Director, Chairman of Nominating & Governance Committee, Member of Executive Committee and Member of Executive Compensation Committee at Rohm & Haas Co. since 1981. Dr. Moose is the Chairman since November 2005 and Independent Trustee since October 2002 at AEW Real Estate Income Fund. She is an Independent Director, Member of Nominating, Governance & Corporate Responsibility Committee, and Member of Finance & Investment Committee at AES Corp. since April 28, 2004. 

Dr. Moose also serves as Director of CDC-IXIS Funds, Verizon New England Inc., since June 2000, Verizon Communications Inc. since June 2000, the Alfred P. Sloan Foundation, and CDC Nvest Funds. She is chairman of the Boston Public Library Foundation as well as chairman of the Harvard Graduate School Council. Dr. Moose is also a Director at Loomis Sayles Funds and at 27 investment companies sponsored by The New England Funds. She is a Trustee at IXIS Advisor Funds. Prior to this, Dr. Moose served as a Director at GTE Corp. from 1978 to 2000, The Boston Consulting Group Inc. since 1975. She is an Overseer of the Beth Israel Deaconess Medical Center, a Trustee of the Boston Public Library Foundation, an Overseer of the Museum of Fine Arts, a Member of Visiting Committee at the Harvard School of Public Health and a Director at the Harvard University Graduate School Alumni Association. She was formerly a trustee of Hampshire College and Wheaton College and a director of the Theatre Development Fund. She is also a member of the Committee of 200, a nationwide organization of women business leaders, and the Massachusetts Women's Forum. Dr. Moose was the 1999 recipient of the American Economic Association's Carolyn Shaw Bell award, which is given annually to an individual who has furthered the status of women in the economics profession. She also received the Outstanding Corporate Director of the Year Award in 2004. 

Dr. Moose received a Ph.D. from Harvard University. She earned a B.A. Summa Cum Laude in Economics from the Wheaton College and an M.A. in Economics from Harvard University.


wedding invitations said...

I did enjoy reading this article as it talks about business. Thus, I learned lessons from Sandra Moose. Thanks for this ideas.

calendars said...

May I invite you to visit this site: http://www.moderngreetings.com/calendars/

return address labels said...

Thanks for giving us some lessons to bear in mind.

Christmas Cards said...

Sandra, I will buy your lessons. Thanks for sharing tips.

Thank You Christmas cards said...

I am so impressed by the good thoughts you've shared. Thanks for these 10 lessons.

christmas party invitations said...

I love the thought when Sandra said, the director need to adjust as to how he thinks to business matters. I think that is one of the best ways that a director must do.

Wedding Engagement Invitations said...

One of the lessons that I like here is this: don't ask dumb questions. This should always be practiced.