A handbook of aphorisms that has become an underground hit among corporate chieftains, including Warren Buffett, is about to get a wider audience.
"Swanson's Unwritten Rules of Management" sets forth maxims developed by William Swanson, the chief executive of No. 4 U.S. defense contractor Raytheon Co., that perhaps seem obvious but are often ignored.
Among them: to have fun; to make the hard decisions even if that results in criticism; and to learn to say "I don't know" when appropriate, and then to go find the right answer.
Some 10,000 copies of the 76-page guide have found their way to executives, many of whom requested extras to send to other people. Excerpts will appear on newsstands Monday in the July issue of Business 2.0 magazine.
"Managers need trust, and to develop the trust of people in their organizations," said Bradley Agle, director of the David Berg Center for Ethics and Leadership at the University of Pittsburgh, who is preparing to publish a study on charisma in CEOs. "Many managers do well, but a number fall short, and many can stand to go back to first principles."
Swanson and some 300 Raytheon managers have used the handbook, which began as a PowerPoint presentation, to help the Waltham, Massachusetts-based company tackle problems Swanson inherited when he became CEO in July 2003.
These included accounting problems, writedowns, performance problems at several units, and the exit of a chief financial officer accused of violating a fair disclosure rule. Another CFO was put on leave in April, as U.S. securities regulators examined accounting practices at Raytheon's commercial aircraft unit from 1997 to 2001.
Among Swanson's advice is that "you can't polish a sneaker." It's a polite way to say it's unproductive to spend time improving something high on style but short on substance.
Swanson also says managers should "look for what is missing," which is often strategically more important than trying to refine what is known.
Another piece of advice: leaders should be consistent in their behavior, and not turn the charm on and off depending on who they are talking to.
Swanson also offers words of caution. One no-no: copying senior executives outside your chain of command on a critical e-mail. Sending such zingers, Swanson says, can cost the sender respect and deflate others.
Deborah Kolb, the Deloitte Ellen Gabriel professor for women and leadership at Simmons School of Management in Boston, said "looking for what is missing is a great piece of advice. That is where you can find innovation and focus on things you can claim as your own."
But she questioned saying "I don't know" too often. "There may be situations where it opens up inquiry," she said. "But people may lose confidence if they look to you for guidance. If you're a woman in a leadership position and say 'I don't know,' people may ask why you're in that role."
Swanson was not immediately available for an interview. His compensation last year fell 16 percent to $5.63 million.
Buffett, for his part, in an October 2004 letter to Swanson said he would send the handbook to his managers and children. "This is really one of the best books I've seen," he wrote.
The chairman of Berkshire Hathaway Inc. is known for using folksy prose in his shareholder letters. A Berkshire spokeswoman confirmed the contents of his letter.
