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Memo to the COO: Update Your Resume

According to a new study, chief operating officers can be likened to your appendix. Not only are they unnecessary, but they can also turn into expensive problems. The study, which will appear later this year in Strategic Management Journal, concludes that companies with a CEO-COO combination substantially underperform those without a second-in-command. For boards of directors, the COO position is always a thorny issue, particularly if they have strong-willed CEOs. Researchers examined 10 years' worth of data, from 1987 through 1996, for more than 400 companies in 21 industries to yield a sample of 3,168 firm-years. The bottom line: having a COO lowered returns on assets an average of about 1%. For a company with $1 billion in assets, that means a $10 million dent in annual profits, according to the study's lead author, Donald Hambrick of Pennsylvania State University's Smeal College of Business. Says Hambrick: "The two broad possible explanations are that the CEO-COO duo is an inferior arrangement or that it is a sign of an inferior CEO." Our guess is that underachieving CEOs will point to the former.


Stanford Business School's popular Interpersonal Dynamics course forces students to critique one another's personal demeanor as it relates to the messages they're trying to convey. Too bashful? Fidgety? Overly aggressive? The class, which students call Touchy Feely, aims to overcome bad body language, which too often equals bad business. Similar classroom pointers are now available in Lois Frankel's Nice Girls Don't Get the Corner Office. As promised in the subtitle, the book details 101 unconscious mistakes women make that sabotage their careers--ranging from tilting their heads when they talk to couching statements as questions and accepting dead-end assignments. Frankel, an executive coach who has worked with FORTUNE 500 companies, offers tips like "Don't substitute tears for anger." In other words, skip the Kleenex, ladies. Get mad, get even--and get ahead.

Give Us Heathrow

Negotiators for the U.S. and the European Union are moving toward liberalizing the transatlantic aviation market. A crucial goal for the U.S. side: more access to London's Heathrow Airport. An old, restrictive U.S.-British pact allows only American and United to fly to the world's busiest hub. For their part, the Europeans want their carriers to be allowed to fly to U.S. cities from anywhere in Europe. KLM, for example, can fly to the U.S. only from its home country, the Netherlands, but would prefer to operate from Paris or London as well. With Air France and KLM heading toward a merger, the market is forcing the issue. "When we reach a deal with the E.U.," says Jeffrey Shane, U.S. Under Secretary of Transportation, "it's going to mean more flights to more places and more choices for passengers."--By Sally B. Donnelly

Nike's Village People

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