Earlier in the week, Coca-Cola unveiled a radical new plan to link director compensation to company performance. Instead of receiving an annual fee of $125,000 ($50,000 cash and $75,000 in stock), company directors will now be given share grants each year equal in value to $175,000. The grants will be payable in cash in three years provided the company increases earnings per share by 8% each year. According to Bloomberg News, the decision to overhaul its compensation structure for directors was strongly promoted by board member Warren Buffett: “It’s a good idea. I’m delighted it’s happening now. It aligns director interests with shareholder interests both on the upside and the downside.”

Maybe I’m missing something here, but this looks like a sweetheart deal for Buffett, already one of the world’s wealthiest individuals. For one thing, his company - Berkshire Hathaway - is Coca-Cola’s largest shareholder, so he’s obviously interested in boosting Coke’s share price for his own personal gain. What’s good for Coke is good for Berkshire Hathaway, so it’s not surprising that he wants to lock in 8% earnings growth each year. Secondly, he’s stepping down from the Coke board on April 19 after 17 years, so the pesky little matter of whether he receives $125,000 in cash each year is moot anyway.

Anyway, according to a recent survey by Corporate Library, only 2% of the 2,000 largest public companies tie a portion of director pay to performance, so Coke is really getting out in front of this one. Corporate governance experts have thus far been upbeat about the idea: “The fact that directors might go without pay is meaningful. It shows, on the part of the directors, confidence that the company has a good future.”

In my own opinion, aligning the incentives of managers and employees with those of shareholders is a great idea. But attempting to align the incentives of board directors with those of shareholders? It doesn’t seem to be as effective, since directors aren’t actually involved in the day-to-day functioning of the company. They’re not down in the trenches. Moreover, they’re already highly-compensated from another source, so any pay they receive as board directors is really just icing on the cake. Instead of dining at swanky, five-star restaurants each night with their trophy wives (or trophy husbands), they’ll be dining at swanky, four-star restaurants each night. I mean, check out some of the folks on Coke’s board: Barry Diller, former AmEx CEO James Robinson III, former Delta Air Lines CEO Ron Allen, former SunTrust Banks Chairman James B. Williams and former U.S. Senator Sam Nunn.

Tags: Coke WarrenBuffett board compensation

In coordination with its Picture a Healthy World campaign, which was intended as a way to build buzz about its innovative healthcare solutions, GE will be celebrating World Health Day in New York City. For the past month or so, GE has been actively promoting its “Picture a Healthy Day” project, in which individuals submit photos of themselves taking part in healthy activities. On April 7, GE will use seven of the biggest digital billboards in Times Square to flash photographs submitted by people from more than 50 countries. The company will also be handing out GE-branded water bottles to thirsty New Yorkers, encouraging them to drink water each day as part of a healthy lifestyle.

Anyway, what’s interesting is that GE is promoting its healthcare-related events on cool hipster Web sites like Daily Candy and Flavorpill, hoping to connect with the sort of young people who don’t normally interact with GE. ClickZ News originally covered GE’s innovative marketing initiative back in February, focusing on the user-generated content and viral elements of the campaign. Props to GE for using blogs and word-of-mouth marketing to get people excited about its innovative healthcare solutions.

Tags: GE healthcare innovation TimesSquare WorldHealthDay

[image: Flavorpill]

For anyone interested in how ideas like “open innovation” and “collaborative innovation” are impacting the way big FORTUNE 500 companies bring new products to market, CIO Insight has posted a great story on innovation at Boeing: New Jet, New Way of Doing Business. After decades of perfecting the art of designing and assembling an aircraft, Boeing is radically overhauling the way that it does business:

“Almost everything about the new Boeing 787 is different—from the cutting-edge materials and electronics used to build the plane, to the technology used during the design and assembly process. It is so different, in fact, that even the Boeing Co. itself—a fixture in the global economy for nearly a century—is undergoing a radical transformation as it builds this next-generation jet.

The design and production strategy employed by the $55 billion, Chicago-based aerospace giant to get the 787 built as quickly and economically as possible involves an unprecedented degree of collaboration between Boeing and its partners around the world—partners who are participating in the actual design of the plane. All of which marks a shift in the way Boeing defines itself: The company is no longer just a manufacturer, but also a high-end systems integrator.”

As one Boeing official points out, “This is not merely a PowerPoint or SharePoint collaboration, or looking at two-dimensional drawings to see if a company can bid on a contract. This is big companies like the Japanese heavies, and our Russian design center, and Boeing in Everett working together. This is something that creates competitive advantage. This kind of collaboration has taken a huge amount of time out of the process. It’s where the big savings are.”

Without a doubt, Boeing is placing a big bet on the idea that “high-level, real-time collaboration” with its design partners can really push forward the innovation process:

“Technology is the enabler of this kind of collaboration, which involves a significant amount of product lifecycle management across multiple countries. Boeing requires all its partners on the 787 to use an application called Catia, made by Dassault, and the plane is designed at a special online site, maintained by Boeing, called the Global Collaboration Environment… Customers, including pilots and flight attendants, were asked to provide input before the design was handed off to design partners.”

Tags: collaboration innovation Boeing jet

[image: Boeing 787 via CIO Insight]

In this week’s New York Magazine, investment guru James Cramer (the controversial stock-picking genius of CNBC’s Mad Money) has penned a surprisingly lucid and detailed analysis of how the New York Times Company - the Old Grey Lady - might be able to re-make itself into a digital juggernaut and take on Google in a high-stakes battle for Internet domination. The first baby step in this transformation, as Cramer points out, was the decision by the New York Times to do away with pages and pages of stock quotes in the daily Business section. (Who reads old stock quotes anyway when you can get up-to-the-second updates via cellphone or BlackBerry?) That’s just the start, writes Cramer, in how the New York Times can deal with a bloated cost structure and a static circulation:

“There’s one way out of this mess for the Times. It is a bold, gutsy, and, some would say, foolish way, at least initially: The Times—here’s the irony—should go all-digital. That’s right. It should abandon newsprint and force everyone to the Web. It should make a stand against Google, using its About.com division—something with real growth, and which is actually working out despite the $410 million in debt taken down to buy the thing—to lead the way. Maybe it should even take the revolutionary step of blocking Google from accessing its content, something no one else is willing to do. Or maybe it should at least say, “This is the deal: You want our stuff, you must share much more with us than you are willing to share with others.” It is worth it to preserve value for the future, to make it so our kids don’t think, Let me go to Google for all the news that’s fit to print. Heck, in another couple of years they won’t even know that the New York Times exists as anything but private-label news source for an Internet portal.

Okay, don’t dismiss this out of hand, especially those of you who love the hard copy. The Times needn’t change overnight. But the stock-table deletion may be a fantastic template for the paper (and all papers); the Web is not just better for stock quotes, it is better for everything. Web ad rates are soaring, the growth on the Web is staggering—the only impediment to more Times on the Web is, frankly, psychological: a fear of destroying a legacy business, a fear that has no place in a world where the Times is worth only $3.7 billion and Google nearly 30 times that. The idea that cutting down huge Canadian trees and shipping giant wheels of newsprint south so it can be made into antediluvian broadsheets delivered door-to-door by expensive carriers is, alas, positively uneconomical, if not totally insane, in an era when anyone younger than 30 doesn’t want the thing in that package. The next generation wants it on PCs, they want it on Treos, they want it on iPods, for Heaven’s sake, but certainly not on newsprint.”

Tags: NewYorkTimes Google JamesCramer

[image: New York Magazine]

After the big brouhaha over the Dubai ports deal in the U.S. and the still simmering rage over those Danish cartoons, let’s show the Arab world some love. Can’t we all just get along? The World Summit on Innovation & Entrepreneurship wrapped up in Oman on Monday, and it looks like innovation and entrepreneurship were two of the buzzwords being bandied about by conference participants:

“A strategy to encourage innovation and entrepreneurship in emerging nations was agreed to in a gathering of business, government and NGO leaders from around the world in a three-day meeting in Muscat, Oman that concluded today. The path outlined by the world leaders includes establishing knowledge-based business clusters, cultivating a culture of innovation among youth, facilitating access to capital, identifying best practices, eliminating red tape, empowering women and encouraging cross- culture collaboration.

The Summit, which was the first of its kind in the Middle East, aimed to develop practical solutions to address the most important issues facing emerging nations and to inspire the development of the next generation of entrepreneurs and innovators. Participants included leaders such as Oman’s minister of Commerce & Industry, His Excellency Maqbool bin Ali Sultan; Michael D. White, chairman of PepsiCo International; Richard Stevens, Boeing senior vice president; Jonathan Lord, Humana chief innovation officer; Stephen R. DuMont, Cisco Systems vice president and global managing director; Kenneth P. Morse, managing director of MIT’s Entrepreneurship Center; Tom Stewart, editor-in-chief of Harvard Business Review; and Ahmed Sheikh, editor-in-chief of Al Jazeera.”

That’s quite a mixer, eh? Harvard and Pepsi mashed up with Al Jazeera; Boeing, Cisco and MIT sitting down in a room with Arab sheiks. No details were released, but one of the conference organizers hinted that the next step will be “a partnership between a Fortune 100 corporation and one of the world’s most populated Third World countries to test pilot what we have learned at this Summit.”

Tags: MiddleEast innovation entrepreneurship

On Sunday’s edition of “60 Minutes,” reporter Lesley Stahl examined the 24/7 work lifestyle in America that has been made possible through new technologies such as the BlackBerry, e-mail and the wireless Internet. As the line between work life and personal life continues to blur, Stahl asks, are American workers really becoming more productive and more innovative? The video segment included the example of office workers who stop by their cubicle every month or so (if then), and work the rest of the time at Starbucks or at home, as well as a married couple that sends instant messages to each other when they’re in different rooms of the house. The favorite toy of this couple’s baby? The BlackBerry, of course. Workers are working harder than ever, yet the extra freedom and mobility seems to be spurring productivity gains.

I missed the first five minutes or so of the video segment, but the definite highlight was Lesley Stahl taking a shower with a West Coast tech CEO. OK, OK it’s not what you’re thinking! Apparently, the CEO had installed Internet, TV and phone connections in every room of his house - and that includes the shower. Lesley didn’t believe him - “Wait, you’d stop taking a shower just to check an e-mail?” - and so she tried it out for herself, talking to the guy’s secretary through a shower-based speaker-phone:

“Greg Shenkman is such a workaholic that he has wired his house with Internet, telephone and television in every single room. As CEO of the global high-tech firm Exigen in San Francisco, he feels he has to be available to his customers at all hours.

“Well, you lose something. You lose some days of your kids’ lives. You lose — some of those tender moments with the family,” Shenkman says. When he stops working, he says he aches. “If you go on vacation, sometimes, in order to sort of relax, it takes a little bit of an effort,” Shenkman says. But he always stays connected.

He’s so obsessed, he has wired his shower. When Greg soaps up, he doesn’t daydream — he watches the business news, checks his e-mail, and answers the phone. 60 Minutes arranged for the producer to call Shenkman, with his shower running. When the speaker phone picked up, the water was turned off automatically, and Stahl and Shenkman could talk to the producer from the shower. The electronics are waterproof — but not foolproof.

“Whoa, what happened!” Stahl said, laughing, as she got a little wet. “We forgot to turn it off,” Shenkman said. “Well, I usually don’t have Lesley Stahl in the shower with me. That would be an unusual occurrence for me,” Shenkman added, laughing. For the record, Stahl says it was her first interview in a shower — and her last.”

Anyway, you can watch a condensed three-minute clip (including the shower scene) here.

Tags: futureofwork 60minutes LesleyStahl