New York Stock Exchange 2011 Report by connie shu

I EC SP E SU IS

The chairman of Berkshire Hathaway shares his views on the economic recovery, rebuilding confidence, regulation and more.

WARREN BUFFETT

A PUBLICATION OF N YS E E U R O N E XT

HOW PUBLIC, PRIVATE & FUTURE CEOs ARE PLANNING FOR GROWTH S H E L L • PE TE R VOSE R O N G ROW TH B A N K R AT E • TOM E VAN S O N D I G ITAL STR ATEG I ES

VIEWS FROM ENTREPRENEURS & MBA STUDENTS

F U S I O N - I O • DAVI D FLY N N O N I N N OVATI O N

X O G R O U P • DAVI D LI U & C AR LE Y RO N E Y O N B R AN D I N G S I E M E N S • PE TE R LÖSC H E R O N J O B C R E ATI O N 2011

F O U RT H Q U A RT E R

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201 1 N Y S E E U RO N E X T CEO R EP ORT

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CONSULTANT TO NYSE EURONEXT Jeanne Cotroneo Darrow

The Growth Challenge

Current and future CEOs voice optimism despite underlying concerns. PLUS: FIVE VIEWS ON THESE CRUCIAL BUSINESS TOPICS 18 SHELL • THE ECONOMY & GROWTH 20 SIEMENS • WORKFORCE & JOB CREATION 22 FUSION-IO • INNOVATION

CONTENT SOLUT I ONS

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SHELL, SIEMENS, FUSION-IO: COURTESY RESPECTIVE COMPANIES; BANKRATE: MEREDITH JENKS; XO GROUP: JOÃO CANZIANI; SUCCESSFACTORS: JONATHAN SPRAGUE; SOLAR PANELS: COURTESY SOITEC

NYSE magazine welcomes reader comments at nyse@timeinc.com. Send e-mail subscription changes to nysemagazine@nyse.com. NYSE magazine is published by NYSE Euronext in conjunction with Time Inc. Content Solutions. © 2011 NYSE Euronext. All rights reserved. NYSE Euronext, New York Stock Exchange, NYSE, the NYSE logo and NYSE magazine are trademarks or service marks of NYSE Euronext. Other trademarks and service marks owned by NYSE Euronext may be used by NYSE Euronext from time to time. All other trademarks, trade names, service marks and logos used in this publication are the property of their respective owners. Neither NYSE Euronext, its subsidiaries, its affiliates, officers, directors, employees, agents or licensors nor Time Inc. Content Solutions makes or has made any recommendation, endorsement or representation regarding any services provided, products manufactured or sold, or securities issued by any of the companies identified in this publication. No statements contained in articles in this publication should be attributed to NYSE Euronext, its subsidiaries, its affiliates, officers, directors, employees, agents or licensors or Time Inc. Content Solutions. Please seek the advice of professionals, as appropriate, regarding your evaluation of any specific security, index, report, opinion, advice, service or product. This publication may contain references to Internet Websites developed, sponsored or maintained by third parties. NYSE Euronext is not responsible for the content on those Websites and makes no guarantees, representations or warranties as to, and shall have no liability for, any content on those sites, including, without limitation, the accuracy, subject matter, quality or timeliness of any content, or the use of any personal information you provide to any such Website. NYSE magazine provides links to Websites solely as a convenience to its readers, and the inclusion of any link does not imply endorsement by NYSE Euronext of any third party or the third party’s Website. Your use of third-party Websites is entirely at your own risk.

24 BANKR ATE • SOCIAL MEDIA & DIGITAL STR ATEGY 26 XO GROUP • REPUTATION & BR AND MANAGEMENT

S UCC ES S FAC T O R S

Love Work Again Happy employees are vital to a strong business, says Lars Dalgaard, CEO of SuccessFactors, which aims to keep workers at peak performance with its talent-management software. B Y SUS A N C A MI N I T I

IN N OVATIO N S Sherwin-Williams’ latest brushstrokes • Teavana CEO Andrew Mack on creating a retail heaven for tea • Soitec’s solar optimization • Mosaic debuts a skillfully designed fertilizer • and more

4 I N S ID E N Y S E E U RO N E X T A message from the CEO • recaps of recent events • new listings • celeb visits • a look at where CEOs see growth potential • and more

AT T H E CLO S E Berkshire Hathaway chairman Warren Buffett takes on issues ranging from the E.U. crisis to restoring confidence and the strength of American capitalism.

AECOM Technology Corp. (NYSE: ACM)

3, 13

Air Products and Chemicals Inc. (NYSE: APD)

American Midstream Partners LP (NYSE: AMID)

Aviva PLC (NYSE Euronext: AV)

COMPREHENSIVE RESULTS OF THE 2011 NYSE EURONEXT CEO REPORT

Berkshire Hathaway Inc. (NYSE: BRK.A, BRK.B)

4, 32

Coca-Cola Co., The (NYSE: KO)

5, 30

# nysemagazine.com/ceoreport

Cosan Ltd. (NYSE: CZZ)

FedEx Corp. (NYSE: FDX)

Fusion-io Inc. (NYSE: FIO)

Hewlett-Packard Co. (NYSE: HPQ)

IBM Corp. (NYSE: IBM)

Johnson Controls Inc. (NYSE: JCI)

Marathon Petroleum Corp. (NYSE: MPC)

Mosaic Co., The (NYSE: MOS)

Novartis AG (NYSE: NVS)

Oiltanking Partners LP (NYSE: OILT) Omnicom Group Inc. (NYSE: OMC)

6 5, 7

Royal Dutch Shell PLC (NYSE: RDS.A, RDS.B; NYSE Euronext: RDSA, RDSB)

Safeguard Scientifics Inc. (NYSE: SFE)

Salesforce.com Inc. (NYSE: CRM)

SAP AG (NYSE: SAP)

Sherwin-Williams Co., The (NYSE: SHW) Siemens AG (NYSE: SI)

WHERE CEOs ARE ALLOCATING FUNDS

8 20

Soitec SA (NYSE Euronext: SOI)

SuccessFactors Inc. (NYSE, NYSE Euronext: SFSF)

SunCoke Energy Inc. (NYSE: SXC)

CLOCKWISE FROM TOP: CHART BY TOMMY McCALL, GETTY IMAGES, DBOX/COURTESY AECOM

The Complete Findings How do the views of U.S. CEOs compare with those of their counterparts abroad? How do entrepreneurs and MBA students rate the current business climate? Get these answers and more online and on iPad — and take our iPad quiz to see how your opinions stack up against those of the current and future leaders we surveyed.

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REBUILDING THE TOWERS

ON THE ! AGENDA CORPORATE DIRECTORS WEIGH IN As NYSE Euronext surveyed chief executives worldwide, Corporate Board Member magazine was polling board directors to discover their top priorities for 2012 and beyond. Find out what respondents cited as their biggest challenges to steering a corporation into the future. # boardmember.com /wdt2011.aspx

Tishman Construction — now a division of AECOM Technology Corp. (NYSE: ACM) — is using a cocoonlike structure to ensure the safety of workers constructing the new World Trade Center complex. # nysemagazine.com/aecom

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N Y S E MAGA Z I NE .C O M

inside N Y S E E U RO N E X T

Concerns and Opportunities Current and future CEOs share their views on growth.

ebt-ceiling debates in the U.S., the macroeconomic situation in the E.U. and talks about added taxes on both sides of the pond stand out among the concerns facing executive suites today. Our seventh annual NYSE Euronext CEO Report reveals discontent with the tax environment (particularly in the U.S. and Western Europe), protectionism, regulatory uncertainty and political instability. Still, corporate earnings have been strong, and, according to our report, business leaders are planning for growth. Beginning on page 14, this issue details the study’s findings. The good news is that our survey respondents are hiring. For the first time, our survey includes views from entrepreneurial CEOs of smaller, private companies and MBA students, and examines opinions about the future across three “generations.” Our study shows greater optimism among entrepreneurs and future CEOs compared with CEOs of listed companies, as well as clear differences in how each group expects to allocate budgets, encourage innovation and leverage social media.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS Certain articles about NYSE Euronext in this magazine may contain forward-looking statements, including forwardlooking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements include, but are not limited to, statements concerning NYSE Euronext’s plans, objectives, expectations and intentions and other statements that are not historical or current facts. Forward-looking statements are based on NYSE Euronext’s current expectations and involve risks and uncertainties that could cause actual results to differ materially from those expressed or implied in such forward-looking statements. Factors that could cause NYSE Euronext’s results to differ materially from current expectations include, but are not limited to: NYSE Euronext’s ability to implement its strategic initiatives; economic, political and market conditions and fluctuations; government and

N Y S EM AGA ZI NE .CO M

Also optimistic is Warren Buffett, who visited the NYSE to celebrate the 50th anniversary of Business Wire, one of 70plus companies that constitute Berkshire Hathaway. See page 32 for his global views on the economy, rebuilding confidence and fostering a culture that builds trust. The key to economic recovery will be getting people back to work. Business leaders of public and private companies alike are catalysts for job creation. Many of the CEOs I am fortunate enough to engage with share the view that policymakers need to bring attention back to creating sustainable, long-term growth that is driven by the private sector, especially small and medium-size enterprises — the primary incubators of new ideas. Collectively we must unleash the job-creating power of business that will fuel our economic recovery. Sincerely,

Duncan Niederauer NYSE Euronext CEO

industry regulation; interest-rate risk and U.S. and global competition; and other factors detailed in NYSE Euronext’s reference document for 2009 (“document de référence”) filed with the French Autorité des Marchés Financiers (registered on April 22, 2010 under No. D.10-0304), 2010 Annual Report on Form 10-K and other periodic reports filed with the U.S. Securities and Exchange Commission or the French Autorité des Marchés Financiers. In addition, these statements are based on a number of assumptions that are subject to change. Accordingly, actual results may be materially higher or lower than those projected. The inclusion of such projections herein should not be regarded as a representation by NYSE Euronext that the projections will prove to be correct. Articles in this magazine speak only as of Oct. 17, 2011. NYSE Euronext disclaims any duty to update the information herein.

Browse additional photos from these events and more on the NYSE magazine app.

Community Conversations Sound bites from recent NYSE Euronext events

ADVOCACY

ENTREPRENEURSHIP

EDUCATION

“In the next election, you’ll see a fight over whether we should be spending less or taxing more. That will set the stage for how we fix our economy’s structural problems in 2013.”

“The infrastructure for bringing tomorrow’s talent together with today’s entrepreneurs needs strengthening. Events like ours bolster the engineering community as a whole.”

“America’s colleges are incubators for some of the world’s most successful business ideas. We help take the country’s best young minds from the classroom to the boardroom.”

—Dan Clifton

—Charlie Kim

—Carlo DiMarco

HEAD OF POLICY RESEARCH, STRATEGAS RESEARCH PARTNERS

“The Debt Ceiling Debate” Executive Forum, August 2

NEXT JUMP CEO AND FOUNDER

SA 500, a Silicon Alley recruiting event co-hosted by Next Jump, October 15

SENIOR VICE PRESIDENT, MTVU UNIVERSITY RELATIONS

Movers & Changers Forum, co-hosted by Viacom Inc. (NYSE: VIA), November 14

High-Energy Branding

ILLUSTRATIONS BY CARLOS APONTE (3)

2011 Executive Marketing Summit highlights tricks of the trade AFTER SKATEBOARDING across the NYSE trading floor, Tony Hawk jumpstarted NYSE Euronext’s third annual Executive Marketing Summit by detailing his ride from underground sports star to global brand manager. Other headliners of the October 4 event — co-hosted by The Wall Street Journal and Interbrand Corp., a subsidiary of Omnicom Group Inc. (NYSE: OMC) — were Starbucks Chairman, President and CEO Howard Schultz; The Coca-Cola Co. (NYSE: KO) Chief Marketer Joseph V. Tripodi; and Angela Ahrendts, CEO of Burberry Group. Ahrendts echoed Hawk’s commitment to authenticity, which the pro athlete said is vital for any company’s marketing initiatives, whether online or face-to-face. “The minute you stop participating in your own world,” he noted, “it becomes obvious that you’re clueless.”

! Learn more about future NYSE Euronext events at nyx.com/events.

It Happens Here Familiar faces spotted at the Exchange

1 RECORDING ARTIST USHER and Van Toffler, President of Viacom Inc.’s (NYSE: VIA) Music & Logo Group, kick off MTV’s 30th birthday celebration on the floor at NYSE. 2 DIGNITARIES including Secretary of State Hillary Rodham Clinton, former NYC Mayor Rudolph Giuliani and NYC Police Commissioner Ray Kelly lead a moment of silence commemorating 9/11. 3 PRINCESS MÁXIMA of the Netherlands

sounds the gong at NYSE Euronext in Amsterdam.

N Y S EMAGA Z IN E .C O M

inside N Y S E E U RO N E X T

NEW LISTINGS

These operating companies are among the new listings on NYSE Euronext from June 20 to October 14. American Midstream Partners LP (NYSE: AMID)

Vanguard Health Systems Inc. (NYSE: VHS)

Synergy Resources Corp. (NYSE Amex: SYRG)

Primus Telecommunications Group (NYSE: PTGI)

Wesco Aircraft Holdings Inc. (NYSE: WAIR)

Gevelot (NYSE Alternext: ALGEV)

Teavana Holdings Inc. (NYSE: TEA) See page 10

LeadMedia Group (NYSE Alternext: ALLMG)

C&J Energy Services Inc. (NYSE: CJES)

XO Group Inc. (NYSE: XOXO) See page 26

Lake Shore Gold Corp. (NYSE Amex: LSG)

AG Mortgage Investment Trust Inc. (NYSE: MITT)

Hudson Valley Holding Corp. (NYSE: HVB)

Marathon Petroleum Corp. (NYSE: MPC)

Avino Silver & Gold Mines Ltd. (NYSE Amex: ASM)

Visiomed Group (NYSE Alternext: ALVMG)

Kodiak Oil & Gas Corp. (NYSE Amex: KOG)

Mauna Kea Technologies (NYSE Euronext: MKEA)

Regency Energy Partners LP (NYSE: RGP)

Ucar (NYSE Alternext: ALUCR)

SandRidge Permian Trust (NYSE: PER)

Tuto4PC.com Group (NYSE Alternext: ALTUT)

Primero Mining Corp. (NYSE: PPP)

Phenix Systems (NYSE Alternext: ALPHX)

Ellomay Capital Ltd. (NYSE Amex: ELLO)

HyperDynamics Corp. (NYSE: HDY)

Damartex (NYSE Alternext: ALDAR)

A2micile Europe (NYSE Alternext: ALA2M)

Orbital Corp. Ltd. (NYSE: OBT)

Oiltanking Partners LP (NYSE: OILT)

Groupe Guillin (NYSE Alternext: ALGIL)

BD Multi Media (NYSE Alternext: ALBDM)

Siparex Croissance (NYSE Alternext: ALSIP)

Bernard Loiseau (NYSE Alternext: ALDBL)

Franco-Nevada Corp. (NYSE: FNV)

SuccessFactors Inc. (NYSE, NYSE Euronext: SFSF) See page 28

Cofidur SA (NYSE Alternext: ALCOF)

Saratoga Resources Inc. (NYSE Amex: SARA) SunCoke Energy Inc. (NYSE: SXC)

Solving Efeso International (NYSE Alternext: ALOLV) OPKO Health Inc. (NYSE Amex: OPK)

Apollo Residential Mortgage Inc. (NYSE: AMTG)

Fortuna Silver Mines Inc. (NYSE: FSM)

Bricorama (NYSE Alternext: ALBRI)

Electromed Inc. (NYSE: ELMD)

ENERGY DEMAND A spate of energy listings at the end of summer has industry analysts predicting that 2011 will be the sector’s most active in a decade. In fact, IPO investment advisory firm Renaissance Capital reports that as of mid-October, 17 new energy offerings had been priced in 2011, compared with a total of 18 for all of 2010 — most of which chose to list on NYSE Euronext. Those newcomers include Marathon Petroleum Corp. (NYSE: MPC), the fifth largest crude oil refiner in the U.S.; Oiltanking Partners LP (NYSE: OILT), a company that stores and transports crude oil, refined petroleum products and liquefied petroleum gas; SunCoke Energy Inc. (NYSE: SXC), which engages in steel coke making and coal mining; and American Midstream Partners LP (NYSE: AMID), which processes and transports natural gas.

! Follow the NYSE Energy Index at nyse.com/about/listed/nyeid.shtml.

Power Partners

Partners that achieve Three-Portal status can promote their accomplishment by using this emblem.

N Y S E MAGA ZI N E .CO M

A KEY BENEFIT of associating with NYSE Euronext has long been its powerful brand recognition. The Exchange’s new Power Partners ProgramTM provides promotional rewards to vendors that best address the needs of mutual customers by meeting specific criteria. The program is currently open to U.S. data vendors, broker-dealers, retail brokers, orderor execution-management systems, and service bureaus, and will expand globally. Power Partners can reap marketing rewards such as advertising, events, digital media and other publicity opportunities. Designations range from one to three portals, depending on the number of criteria met. To date, three firms have achieved the highest Three-Portal status: MIXIT, LiquidityBook and Fidessa. Two-Portal Power Partners include RealTick and Scottrade.

COURTESY MARATHON PETROLEUM CORP.; OPPOSITE PAGE: MAP BY REMIE GEOFFROI, GRAPHS BY TOMMY McCALL

Hexcel Corp. (NYSE Euronext: HXL)

GLOBAL COMMUNITY

Where Revenues Will Grow

The seventh annual NYSE Euronext CEO Report asked current and future business leaders which regions have the most growth potential through 2012. CANADA More than onethird of listed-company CEOs, almost half of emerging-company leaders and nearly six out of 10 MBA students consider Canada crucial or important.

UNITED STATES Nearly all respondents cite the U.S. as crucial or important, although emerging-company CEOs and MBA students are most enthusiastic.

CEOs of privately owned companies, most backed by private equity or venture capital

WESTERN EUROPE Around six out of 10 CEOs of listed and emerging companies cite Western Europe as important to growth. MBAs are even more gung ho.

Listed-company CEOs Emerging-company CEOs* MBA students

CHINA MBA students in particular are enthralled by China’s prospects.

SOUTHEAST ASIA CEOs of listed and emerging companies respond similarly to the region, while seven out of 10 MBA students see Southeast Asia as important.

BRAZIL The largest country in South America attracts three out of 10 CEOs of listed and emerging companies; twice as many MBA students say Brazil is important.

Source: ORC International for NYSE Euronext

! Find more results of the 2011 NYSE Euronext CEO Report on page 14, in the Q4 iPad edition and at nysemagazine.com/ceoreport.

HEARD ON THE STREET

Big companies have failed to get it right in China because they didn’t understand the Chinese consumer.” — Jez Frampton, Global CEO of Interbrand, a subsidiary of Omnicom Group Inc. (NYSE: OMC)

! Glean additional insights from 2011 Executive Marketing Summit panelists at youtube.com/user/nysetv1. N Y S EMAGA Z I N E.C O M

innovations

News and trends from the global business community

A FRESH COAT

Sherwin-Williams concocts a recipe for less-toxic, high-performance paints. ONE OF THE FIRST THINGS you see upon entering The SherwinWilliams Co.’s (NYSE: SHW) Cleveland headquarters is a glass case displaying the company’s top 10 inventions — well, nine, to be precise. “The tenth box is open,” says Chairman and CEO Chris Connor. “The message to our people is that this space is reserved for their invention.” One candidate for the tenth spot, Connor says, is a new environmentally responsible paint formulation made from WaterBased Acrylic Alkyd Technology. “For decades we have been working to find that sweet spot between traditional oil-based paints that contractors love because of their easy application and durability and the green benefits of water-based paints,” the CEO explains. “That has been the Holy Grail in our industry.” The secret? A masterful blend of soybean oil and polyethylene terephthalate, or PET, from recycled plastic bottles, which SherwinWilliams is using to replace the toxic compounds that make up oil-based paints, Connor says. The company says the resulting paint emits 60 percent fewer volatile organic compounds (VOCs) than traditional oil-based alkyd paints do as they dry. SherwinWilliams estimates that this new formula, which it has been putting on store shelves in place of oil-based paints since 2010, eliminated the release of 800,000 pounds of VOCs last year. Connor says a close partnership with the U.S. Soybean Export Council helped his team explore ways to use soybean oil to make high-performance paint. Steve Revnew, the company’s vice president of product innovation, says the R&D process alone took about five years. “Our polymer scientists started by looking at the molecular structure of soybeans and PET,” he says. “They used this knowledge to build a new resin, which is the backbone that provides the performance properties we were looking for.” Plenty of performance testing and customer feedback helped get the formula right before the paintmaker began producing it in large quantities. In June it earned the U.S. Environmental Protection Agency’s Presidential Green Chemistry Challenge Award. Revnew notes the effort was worth it: “This is a breakthrough innovation, not just a new product. That doesn’t happen overnight.” — Chris Warren

NY S E M AG A ZI N E.C O M

! For a look at Sherwin-Williams’ top inventions, download the app or visit nysemagazine.com /SHWbigideas.

Learn more about these companiesâ&#x20AC;&#x2122; brightest ideas on the NYSE magazine app.

GREEN SAVINGS In the 2010

production of its new water-based paints, Sherwin-Williams reports using:

pounds of recycled plastic bottles

320,000

pounds of soybean oil

CLOCKWISE FROM LEFT: GETTY IMAGES (3), SHUTTERSTOCK

60%

fewer VOCs are released into the air, Sherwin-Williams says, when its new eco-friendly paint is used in place of typical oil-based alkyd paints.

250,000

N Y S E MAGA Z I NE .C O M

innovations

LEAVES OF GREEN

The founder of Teavana brews up a premium tea retailer.

Gallons of Opportunity: Tea is the second most consumed beverage on the planet behind water. But historically, percapita consumption in the U.S. has been among the lowest in the world. That’s what excited us: Most Americans have not been exposed to good tea. The challenge is getting them to switch from sugary drinks to healthy tea. The Intimidation Factor: Tea, like wine, can be intimidating. Newcomers need someone to explain the nuances among green, white and black varieties. That’s why we have teaologists who can share the history and the benefits of any tea we sell.

Think Godiva, Not Starbucks: While we’ll sell you a cup of tea, we are primarily a specialty retailer. I consider us more like the Godiva, or the Williams-Sonoma Inc. (NYSE: WSM), of tea. We offer premium products in an engaging setting that introduces customers to the tea lifestyle, encourages product trials and promotes customer loyalty.

Nobody is making tea accessible and fashionable like we are.” Global Growth: All of our U.S. stores are corporate owned, but outside of the country they will be franchised. Next year we’ll go to the Middle East in partnership with M.H. Alshaya Co., which is the gold standard of retail operators in the Middle East, with more than 55 brands — including Starbucks, M.A.C. and Pottery Barn — and 2,000 stores. In many instances, Alshaya’s execution is just as good as, if not better than, the parent companies’. While the Middle East has a rich tea culture, nobody there is making tea accessible and fashionable like we are. We tried a similar strategy in Mexico, and we have 17 locations there now. In the near future you’ll see us go into Canada, and we’ll evaluate other opportunities as they come. — As told to Josh Dean

! Learn more about Mack’s growth strategy for Teavana on iPad and at nysemagazine.com/tea.

ANDREW FRENCH; OPPOSITE PAGE: JOSÉ J. ABAURRE/COURTESY SOITEC, GETTY IMAGES

Teavana sells white, green, herbal, maté and oolong teas and more from all over the world.

ANDREW MACK and his wife were traveling the world in 1996 when he found himself “fascinated by the flavors and profiles” of the teas they encountered — especially in such countries as China and Japan, where tea is an intrinsic part of the culture. But when the couple returned to the U.S., they were disappointed by “stale tea and feeble tea bags.” Mack, who’d been working in restaurant management, saw an opportunity. In 1997 he and his wife (who has since retired from the business) opened a carefully curated tea shop in Atlanta, called Teavana. Mack says it was financed with their life savings and built with their own sweat and tears. Today — nearly 200 stores later — Teavana Holdings Inc.’s (NYSE: TEA) empire of leaves continues to grow. With proceeds from a July IPO, Mack expects to have 500 U.S. stores by the end of 2015, plus additional stores abroad with the help of franchise partners.

INSURING EVERY CHILD’S FUTURE

Aviva pledges to get at-risk kids back into schools.

DRY HEAT

Soitec’s CPV technology opens new markets for solar energy. optimized for only one wavelength, Lerchenmüller explains. As a result, Soitec’s CPV always the best candidates for solar energy. systems boast sunlight-to-electricity converThat’s because concentrated solar thermal power plants require large amounts of water sion yields of 26 percent compared with around 13 percent for PV technology, to cool their systems, and traditional he says. When placed on trackers photovoltaic, or PV, cells show that follow the sun, those systems significant drops in efficiency THE SUNLIGHT-TOcan generate a constant flow of in very hot environments, says ELECTRICITY CONVERSION YIELD energy in daylight hours. Hansjörg Lerchenmüller, senior THAT SOITEC AIMS TO In October 2010, Soitec gave vice president of Soitec SA’s REACH BY 2015 Johnson Controls Inc. (NYSE: JCI) (NYSE Euronext: SOI) Solar the rights to use Concentrix technology in Customer Group. The company’s Conan array of solar power plants the company centrix concentrated photovoltaic, or CPV, plans to build worldwide. Earlier this year, technology breaks that tradition by using Soitec entered into a purchase agreement solar cells that don’t lose efficiency at high with San Diego Gas & Electric to build five ambient temperatures and systems that do CPV power plants in Southern California, not need water for cooling, he explains. using the Concentrix technology to generate Soitec, based in Grenoble, France, is one 155 megawatts of clean, renewable energy — of the world’s largest suppliers of silicon-onenough to power 60,000 homes. Soitec is also insulator, or SOI, wafers used in the semiworking with European research labs Fraunconductor industry. Its CPV systems use hofer ISE and CEA-Leti to develop solar cells Fresnel lenses (like the ones in lighthouses) capable of an even higher energy yield. Says to magnify sunlight 500 times and focus it Soitec Chairman and CEO André-Jacques onto small, “multijunction” solar cells. Each Auberton-Hervé: “Close relationships with junction is tuned to a different light waveinstitutions like these keep our company on length, accessing a broader spectrum of the the cutting edge.” — Rebecca McReynolds sun’s rays than do standard cells, which are

IRONICALLY, THE SUNNIEST PLACES aren’t

37%

OPERATING IN 28 countries, global insurance provider Aviva PLC (NYSE Euronext: AV) sees firsthand the growing global crisis of homelessness and its impact on children, says Group Chief Executive Andrew Moss. To help, the London-based company launched its Street to School campaign in 2009, working with organizations around the world to identify and help at-risk children. In India, for example, Aviva is partnering with Save the Children and CRY (Child Rights and You) to give more than 100,000 children access to education and job training over the next three years. In Turkey it is helping the Social Service and Child Protection Agency rehabilitate Istanbul’s street children. And this year, Aviva extended its reach to the U.S., aiding Iowa Homeless Youth Centers, which places homeless teens in transitional living programs so they can return to school or find work, says Karen Lynn, Aviva USA’s head of corporate affairs. Aviva has committed to helping half a million children worldwide in the next five years, she adds, pledging at least half of its total charitable donations for that period to Street to School initiatives and encouraging its employees to volunteer for Street to School projects. Adds Moss: “We believe in using our global scale as a catalyst for change.” — Rebecca McReynolds

N Y S E MAGA Z I NE .C O M

innovations

the company reportedly holds more than 50 patents related to hydrogen-dispensing technologies. It has placed more than 130 hydrogen fueling stations in the U.S. and 19 other countries to date — but this is the first that draws from an almost inexhaustible resource, Kiczek says. (Hydrogen is typically extracted from natural gas and

FUELING THE FUTURE Air Products taps a renewable resource to create fuel for hydrogen vehicles. A FUEL THAT COMES FROM…wastewater?

That’s what Air Products and Chemicals Inc. (NYSE: APD) delivers at its new Fountain Valley, Calif., hydrogen fueling station. It’s the first of its type in the world, the company reports, drawing purified methane gas from the nearby Orange County Sanitation District wastewater treatment plant and extracting hydrogen from it for use in a new generation of vehicles. Given that wastewater represents a plentiful resource, Air Products contends that its technology could have significant ramifications for the world of transportation. “If we can tap other waste streams — such as landfill gas, agriculture and other biogas feedstock — it would be possible to support 200 million hydrogen fuel-cell vehicles in 12

N Y S EM AG A Z I N E.C O M

20%

GLOBAL HYDROGEN SALES ACCOUNT FOR ABOUT 20 PERCENT OF AIR PRODUCTS’ TOTAL REVENUES.

the U.S.,” says David J. Taylor, vice president of energy businesses at Air Products. The Fountain Valley station is part of Air Products’ efforts to develop a global infrastructure required for a hydrogenfueled economy, says Global Business Director Ed Kiczek. A supplier of atmospheric and specialty gases, materials, products and services to various industries,

other fossil fuels.) The benefits of hydrogenpowered vehicles, says Kiczek, are that they promote independence from depleting global resources and they’re highly efficient and environmentally friendly since they emit only water vapor from their tailpipes. Hydrogen vehicles are powered either by fuel cells or by hydrogen-fueled internal combustion engines, and they’re a rare find on the road today. But the National Research Council projects that 2 million of them could be operating in the U.S. by 2020 and nearly 60 million by 2035. The current scarcity of hydrogen fueling stations is a factor in delaying consumers’ switch to the technology, Kiczek says. To answer that, the company continues to explore renewable sources of hydrogen, and Air Products has already committed to building eight more fueling stations in the Los Angeles area over the next 18 months at locations chosen in collaboration with automakers. “Auto companies are readying for a 2015 introduction of fuel-cell vehicles into the commercial market,” Kiczek says. “Right now is a critical time to get the infrastructure out there.” — Chris Warren

! View a slideshow of Air Products’ hydrogenfueling technologies on iPad.

COURTESY AIR PRODUCTS; OPPOSITE PAGE: GETTY IMAGES, COURTESY PIXELOPTICS

Tapping into waste streams may make it possible to support 200 million hydrogen fuel-cell vehicles in the U.S.”

more at nysemagazine.com/aecom ▪ AECOM Technology Corp. (NYSE: ACM) deploys a new safety system for Tishman Construction workers rebuilding the World Trade Center site.

A BALANCED DIET — FOR CROPS

Mosaic hopes its new high-yield fertilizer will help knock out world hunger. “COMPARED WITH THE WHEAT, corn and

sugarcane of years past, today’s crops eat like 16-year-old boys,” says Rick McLellan, senior vice president at The Mosaic Co. (NYSE: MOS). “They need constant feeding.” Mosaic is helping satisfy their appetite. The company is one of the world’s largest producers of phosphates and potash, both key ingredients in fertilizer. It focused on that core commodities business until 2000, when it began developing phosphate-based animal feed and crop fertilizers. The addition of these premium products not only helps Mosaic support the ever-growing global demand for food — part of its core mission — but “differentiates us from more traditional competitors and provides great value for customers as they seek higher yields,” says President and CEO James Prokopanko. What makes a better fertilizer? Typically, fertilizer is made up of a mix of nutrients, such as nitrogen, phosphorus, sulfur and zinc. But as anyone who has ever baked a cake knows, simply stirring those ingredients doesn’t guarantee that they’ll be distributed

evenly. One part of a field, for example, could get a heavy dose of a nutrient while another part gets none. To address this problem, Mosaic developed MicroEssentials, which Farm Industry News named the most innovative fertilizer product of 2010. MicroEssentials, says McLellan, blends all of the ingredients into one perfectly composed granule, which results in more efficient distribution and creates a greater and higher-quality yield. Gary Halvorson, general manager of CHS Ag Services, a Minnesota-based

fertilizer distributor, says MicroEssentials SZ (one of five formulations that address different types of soil) has produced good responses in corn, sugar beets and spring wheat. In its own corn yield trials, Mosaic says, MicroEssentials produced between 2.7 and 7.7 more bushels per acre than competing fertilizers. With sales escalating, Prokopanko says the company has invested $70 million to expand MicroEssentials production capacity to 2.5 million tons a year from 1.5 million tons. McLellan reports that Mosaic’s premium products represent 15 percent of its capacity this year, but he anticipates that the area will constitute 25 percent in the near future. Mosaic also sees opportunity in emerging countries, which are racing to keep agricultural output on pace with their populations’ upward mobility. It is working with farmers and government officials in India on a MicroEssentials recipe that will work for local soil conditions and crops. This research serves not only a business purpose, says McLellan, but a worthy cause. — Sara Pepitone

VISION QUEST

Safeguard Scientifics sees a potential revolution in eyewear. CALL THEM THE WORLD’S first “smart” eyeglasses: emPower! eyewear is now available through retailers and doctors’ offices, thanks in part to financing from Wayne, Pa.-based Safeguard Scientifics Inc. (NYSE: SFE), a provider of growth capital to life sciences and technology companies. “This is the third major innovation in eyeglasses in as many centuries,” President and CEO Peter J. Boni says of the electronically focusing collection developed by Roanoke-based PixelOptics. Each pair has a battery-operated electronic chip embedded in one of the temples. Tilt your head a certain way or tap the temple, and the rechargeable chip automatically adjusts the field of view for clarity at any distance and any angle. Boni projects a $13-billion-ayear market for this technology and forecasts rapid growth as the population in the developed world ages. Safeguard Scientifics deployed $25 million in PixelOptics in April, for a 25 percent ownership stake. — Brian Dawson

THE NUMBER OF COMPANIES IN SAFEGUARD SCIENTIFICS' PORTFOLIO, INCLUDING PIXELOPTICS

N YS E MAGA Z I NE .C O M

R E POR T

THE

Challenge

Current and future CEOs voice optimism despite underlying concerns.

usinesses are growing. So say hundreds of CEOs from our community of leaders who participated in our seventh annual NYSE Euronext CEO Report. In addition to CEOs of NYSE Euronext companies, this year’s survey for the first time polls more than 100 CEOs from “emerging companies” (up-and-coming firms, most backed by private equity or venture capital) who are stimulating change in business and society. We also surveyed aspiring corporate leaders — some 200 MBA students and recent MBA grads. Together, they comment on the pressing topics of the economy and growth, the

workforce and job creation, innovation, social media, and brand and reputation management. The groups agree on their concerns regarding protectionism and trade issues, as well as financial and political stability. Regulation and taxes draw their fire, and many worry about our global education systems. Yet their perspectives diverge when it comes to doing business in the future, particularly on the topics of social media and innovation. The bottom-line finding is this: Our three generations of leaders and aspiring leaders are getting to growth and overcoming economic setbacks while maneuvering around the global political and regulatory obstacles.

CHARTS BY TOMMY McCALL S U R V E Y C O N D U C T E D B Y O R C I N T E R N AT I O N A L O N B E H A L F O F N Y S E E U R O N E X T

N YS

CEO

M AG A

iPad

NYSE EURONEXT

Find more results from the 2011 survey on the NYSE magazine app.

FINANCIAL & POLITICAL

instability

CROWDSOURCING SPARKS

KEEP US UP AT NIGHT

innovation

THE U.S. MUST GET A HANDLE ON

TAXES

WE WANT BETTER ROI FROM OUR

Brands

Regulation IS A MAJOR CONCERN

Social Media WILL RULE

VISION

IS THE NO. 1 QUALITY A CEO NEEDS

Growth PROJECTIONS

WE ARE

HIRING!

(THOUGH THE ECONOMY IS STILL HURTING)

Education NEEDS IMPROVEMENT

Reputation is everything

T H E E C O N O M Y & G R O W T H 1 8 | W O R K F O R C E & J O B C R E AT I O N 2 0 | I N N O VAT I O N 2 2 S O C I A L M E D I A & D I G I TA L S T R AT E G Y 2 4 | R E P U TAT I O N & B R A N D M A N A G E M E N T 2 6

NYSE EURONEXT

CEO R E POR T

PERCENTAGE WHO THINK THE FOLLOWING COULD IMPACT GROWTH

GROWTH INHIBITORS

Beyond the economy

CEOs worry that regulation, inflation and rising costs are among conditions that could hinder growth. Strong Some impact impact Listed-company CEOs Emerging-company CEOs

GROWTH TRAPS

U.S. eco nom y

CEOs and future leaders diverge on many issues yet share these mutual concerns. David Johnson, CEO of seven-year-old Achates Power Inc., expects that a world looking to conserve energy will embrace his San Diego-based company’s efficient engine design. But he admits that “economic uncertainty may cause our customers and prospects to be more cautious, to preserve their capital and to move slower. This, in turn, would make it more difficult for us to secure new business and cause us to adjust our growth plans.” Johnson is hardly alone in his concern about the future. Even as most companies prepare for growth, CEOs express worry over not just the economy but also protectionism and trade restrictions, financial and political instability, regulation and taxes. In fact, six out of 10 listed-company CEOs who participated in the 2011 NYSE Euronext CEO Report expect the U.S. to have an unfavorable corporate tax environment during the next three years. Current and future business leaders also fret about how well educational systems are preparing the next generation of workers, especially in the U.S.: Nearly twice as many CEOs based in the U.S. as those headquartered elsewhere view their country’s education system as fair or poor. MBA students offer solutions. “The global landscape has changed quickly, yet schools still focus on standardized testing and a curriculum that does not keep up with the times,” says Sean Donnelly, a Fordham University MBA student with a concentration in international finance. Vlad Karas, who is studying innovation and technology management at the Polytechnic Institute of New York University, hopes schools will do more to stimulate creativity: “Kids should not be afraid to take chances and play with new ideas, new concepts and creative thinking — this is what will drive innovation for the next generation.”

! For more thoughts from emerging leaders, and to see how your opinions stack up against our respondents’, get the Q4 issue on iPad. To see how our research was conducted, visit nysemagazine.com/methodology.

*Some items may not add up due to rounding

PERCENTAGE OF CEOs WHO HAVE CONCERNS REGARDING THE FOLLOWING COUNTRIES

34/33 30/28

80/73

19 /16 43/34

Canada

65/65

REGIONAL CONCERNS

Protectionism, political stability and financial stability

44/49

give respondents concern regarding specific regions — particularly in the U.S. and in Europe.

74/65

33/47

United States

48/62

45/47 27/41

Mexico

58/65 40/62

61/54 Brazil

South America (except Brazil) Source: ORC International for NYSE Euronext

N Y S E M AG A ZI NE .C O M

SU RV EY S IN

46/48

Western Europe

TAX ENVIRONMENT

U.S. corporations face an unfavorable tax outlook

during the next three years, according to 60% of listed-company CEOs and 59% of emerging-company CEOs. The nearest rival? Western Europe, cited by 46% and 48%, respectively.

Japan

34 / 15

South America

32/35

(except Brazil)

26/21

Brazil

21/41

Mexico

21/26

India

20/22

China

19/16

Canada

18/22

Eastern Europe

17/5

Australia & New Zealand

9/18

Southeast Asia

6/21

Middle East

77/68

EDUCATION SYSTEMS

About half of all respondents

82/74

48/40

42/60

28/32 42/35 29/30

54/50 81/82

25/64

32/45

34/27

Eastern Europe

52/46

PERCENTAGE WHO SAY THEIR COUNTRY’S EDUCATION SYSTEM IS FAIR OR POOR %

63/52

33/51

34/39

Western Europe

indicate that their country’s education system does only a fair or poor job of providing students with the skills to succeed in the workforce.

66/79

39/57

China

Poor LISTED CEOs

Japan

42/47 34/35

55%

36/41

Middle East KEY Listed-company CEOs Emerging-company CEOs Protectionism or trade restrictions Financial stability Political stability

Fair

India

Southeast Asia

37/23 23/19

16/10

Australia and New Zealand

Poor EMERGING CEOs

46% 35

Fair

Poor MBAs N YSE MAGA Z I NE .C O M

60/59

United States

HT IG

PERCENTAGE OF CEOs WHO HAVE CONCERNS ABOUT THE TAX ENVIRONMENT IN THE FOLLOWING COUNTRIES

with

PETER VOSER

NYSE EURONEXT

CEO R E POR T

SHELL

Royal Dutch Shell’s CEO hopes to lead in an industry that is undergoing seismic change.

JUST THE FACTS Headquarters The Hague, the Netherlands

Revenue

$368.1 billion (fiscal 2010)

Market cap* $228 billion

Employees 93,000

Listed since July 20, 2005

*AS OF 10/17/2011

hen Peter Voser, 53, took over from the retiring CEO of Royal Dutch Shell PLC (NYSE: RDS.A, RDS.B; NYSE Euronext: RDSA, RDSB) in 2009, he set a goal to make Shell “the most competitive and innovative energy company in the world.” But before the former CFO could turn his full attention to reshaping the company for a world where energy demand would inevitably increase, supply would shrink and tighter environmental regulations would come into play, he had to scale a stone wall. “Shell and its competitors faced the unprecedented challenge of building a more sustainable energy system while responding to the worst economic downturn since the 1930s,” observes Voser. Even as he made bold bets on the future, Voser began reducing expenses through a combination of flatter structures in Shell’s senior management team, faster decision-making and simpler ways of working. The company also sold noncore assets, including some European and African downstream operations, using much of the proceeds to shore up higher-margin businesses and maintain R&D levels through the worst of the downturn. “Current economic challenges aside, energy remains a long-term business,” says the CEO, who points to estimates that fuel needs are poised to soar. The International Energy Agency expects China, India and Brazil to

N Y S EM AG A Z I NE .C O M

double their energy consumption during the next 40 years, meaning that these three economies alone could account for a third of global energy consumption — on top of continued existing demand. Voser estimates that Shell will invest more than $100 billion globally between 2011 and 2014, with a target of raising its production by 12 percent from 2010 levels to 3.7 million barrels of oil equivalent a day, one of the fastest growth rates in the industry. “Whereas much of the world is still drawing up plans, we are doing what we can today to make a difference,” says Voser. “That means producing more natural gas, focusing on biofuels, helping to develop carbon capture and storage technology, and trying to improve energy efficiency in our operations.” When it comes to renewables, Shell has shifted most of its attention to biofuels, especially through Raizen, a joint venture with Cosan Ltd. (NYSE: CZZ), a processor of Brazilian sugarcane. The venture is developing what Voser says is the lowestcarbon biofuel commercially available: ethanol that can reduce CO2 emissions by around 70 percent compared with standard petroleum. Raizen’s blueprint calls for more than doubling annual production to 5 billion liters of sugarcane ethanol in the next five years from about 2.2 billion liters in 2010.

THE END OF AN ERA But Shell isn’t putting aside its focus on its traditional hydrocarbon products, although Voser warns that “the era of so-called easy and cheap oil and gas is over.” With that in mind, Shell expects to increasingly explore challenging environments, such as the Arctic. Nearly 200 miles off the coast of Brazil, the company is drilling in pre-salt areas — so named because the reserves are trapped beneath a geological cap of impermeable salt that restricts the oil from pushing up.

COURTESY ROYAL DUTCH SHELL

A New Energy Blueprint

S IG HT IN S EY RV SU

Whereas much of the world is still drawing up plans, we are doing what we can today to make a difference.” Peter Voser CEO, SHELL

Part of Shell’s R&D budget is used to develop sophisticated computer systems that help geologists identify hidden reservoirs more accurately and thus place drilling rigs more precisely. Technology also has enabled Shell’s shift from oil to natural gas, which by next year will represent more than half of its production, says the company. Noting that natural gas plants emit up to 70 percent less CO2 than old coal-fired plants, Voser says: “North America now has enough gas reserves to last for the next 100 years, thanks to discoveries of gas trapped in dense rock — tight gas — and new production techniques.” With tight gas and shale gas potential elsewhere, he cites the International Energy Agency in noting that “the world has enough gas for 250 years at the current level of production.” Shell is also developing procedures aimed at cleaner energy. For example, the company has filed more than 3,500 patents that apply to the Pearl Gasto-Liquids (GTL) project, which opened in June in Qatar. This plant, explains Voser, refines natural gas, turning it into diesel fuel for vehicles, kerosene for aircraft and other products for the chemical sector. Pearl GTL’s water processing plant, the company claims, recovers, treats and reuses every drop of the industrial process’s water. With a capacity to treat 280,000 barrels of water a day, Pearl GTL’s water treatment plant is the world’s largest, comparable to that for a city of 140,000, according to the company. While mapping out a new energy blueprint for Shell, Voser is counting on something that might be the biggest challenge of all: collaboration. To meet growing energy needs, “we need to bring together scientists, urban planners, businesses, governments and society to develop policies and solutions,” he says. Voser is optimistic. “The human race has faced many challenges in the past and surmounted them with ingenuity and creativity.” — Susan Caminiti

GREAT EXPECTATIONS Compared with last year, we’ve made progress: Fewer listed-company CEOs (85 percent) rate the global economy as fair or poor, compared with 96 percent in 2010 and 99 percent in 2009. And more are planning for growth, despite significant concerns about protectionism (particularly in China) and financial and political stability in many regions — including the U.S. and Europe. CEOs of listed companies are budgeting larger increases for capital expenditures, energy and regulatory compliance, while emerging-company CEOs — those who head businesses backed by venture capital or private equity — are spending more for R&D, technology, marketing and PR.

Although they still consider the global economy fair at best… PERCENTAGE WHO THINK THE ECONOMY IS FAIR OR POOR

85%

96% 4% Good

15% Good 61% Fair

75% Excellent

19%

6% 24%

56%

Poor

Fair

LISTED CEOs

40%

Good

48%

Poor

27%

Fair

EMERGING CEOs

Poor

MBAs

…most CEOs are planning for growth. Two-thirds of listed-company CEOs and more than four in five emergingcompany CEOs expect growth in their own companies. PERCENTAGE OF CEOs WHO EXPECT GROWTH

76% 18% No change

30%

Significant growth

84% 6%

Decline

46%

Modest growth

LISTED CEOs

12% No change 45%

Significant growth

Decline

39%

Modest growth

EMERGING CEOs

! To see where executives are allocating the largest budget increases, check out nysemagazine.com/chartindex or visit the NYSE magazine app.

N YSE MAGA Z I NE .C O M

with

PETER LÖSCHER

NYSE EURONEXT

CEO R E POR T

SIEMENS

Staffing Up Siemens identifies two growth drivers: globalization and demand for modern solutions to infrastructure, health care and energy needs.

N Y S EM AG A Z I NE .C O M

JUST THE FACTS Headquarters Munich, Germany

Revenue

$103.4 billion (fiscal 2010)

Market cap* $87.9 billion

Employees 421,000

Listed since March 12, 2001

*AS OF 10/17/2011

Löscher believes that adding diversity to Siemens’ workforce is crucial to its ability to grow in new geographic and sector markets. “We need to create great, diverse teams made up of people who believe in the company’s totality and have the right passion,” he explains. “At the end of the day, there must be chemistry.”

A U.S. PUSH Siemens is particularly interested in growth in the U.S., where it already employs more than 60,000 in some 100 manufacturing facilities. The company reports “significant orders,” such as a contract to supply Amtrak with 70 energy-efficient electric locomotives, which will create 250 green manufacturing jobs at three plants. Siemens also is expanding an Illinois facility that makes wind turbines and an Iowa wind blade manufacturing plant, together generating some 1,100 jobs. In explaining why Siemens is spending nearly $200 million to build a gas turbine factory in Charlotte, N.C., Löscher notes: “By manufacturing here, we get proximity to our largest market, highly skilled workers educated at some of the world’s best universities — with access to the best research facilities — and cutting-edge innovation that we can link directly to our manufacturing sites.” That plant, which expects to employ 1,000 people and spur 2,000 indirect jobs, is slated to export gas turbines to markets across the world. Siemens added around 1,000 new U.S. jobs last fiscal year, taking advantage of a small resurgence in manufacturing and tax incentives. For example, the company, which is investing $2.9 million to expand a smart-grid project in Wendell, N.C., is set

COURTESY SIEMENS

lectronics and engineering conglomerate Siemens AG (NYSE: SI) already has 421,000 employees in 1,640 locations around the globe. Yet with a new worldwide focus on infrastructure, health care and energy solutions such as wind power, the company is creating more jobs. President and CEO Peter Löscher says it’s a case of identifying opportunities — even in tough economic times for some of Siemens’ key markets — and directing the company’s resources accordingly. “We laid the foundation for economic growth quite a while ago by addressing the megatrends of demographic change, urbanization, climate change and globalization,” says Löscher, 54. “The current economic crisis didn’t catch us unawares. We never let up during the recession, which has helped us come out of it relatively unscathed.” As a result, Löscher says, today the company is a “pioneer in energy efficiency, industrial productivity, affordable and personalized health care, and intelligent infrastructure solutions.” Being a leader in those fields, he says, contributes to a reputation that draws a dedicated workforce from around the world. In fact, Siemens created more than 16,000 jobs worldwide in the first nine months of fiscal 2011 as Löscher pushed the company in new directions and into new markets. A native of Austria and a former pharmaceutical industry executive whom Siemens recruited in 2007 as the first outsider to head the company in its 164-year history, he has taken a far more global perspective than some of his predecessors, perhaps owing to stints in locales as diverse as Japan, Spain and the U.S. (He also studied at The Chinese University of Hong Kong.)

S IG HT IN S EY RV Peter Löscher CEO, SIEMENS

We need to create great, diverse teams. At the end of the day, there must be chemistry.”

EMPLOYMENT ROLL CALL Despite fears of a sluggish economy, 17 percent more listed-company CEOs than last year expect to add to their payrolls — 62 percent versus 45 percent in 2010. Emerging CEOs were even more optimistic, with seven out of 10 adding jobs. Average increases are healthy: Heads of listed companies hope to boost their workforces by 18 percent and entrepreneurs may up theirs by 34 percent. Look for most jobs to be in their home countries, especially in the U.S., Europe and China.

Despite economic challenges, CEOs expect to add to their workforces through 2012… CHANGES CEOs EXPECT TO MAKE TO THEIR WORKFORCE

to receive up to $2.6 million in state tax incentives if it meets its goals of creating 139 new jobs. Yet Siemens frequently finds itself unable to hire enough qualified workers — despite U.S. unemployment rates topping 9 percent. Currently the company is looking to fill more than 12,000 positions worldwide, including more than 3,000 in the U.S. Many of these jobs are for workers that vocational schools used to train when manufacturing employed a higher percentage of the U.S. workforce. To help qualify would-be employees, Siemens launched an apprenticeship program modeled on its long-standing practice in Germany. The company pays high school seniors an hourly wage to learn a skill, then puts them through a two-year community college. When finished, they have an inside track to be hired by Siemens. Currently the company provides this training to nearly 10,000 young people in Germany, Saudi Arabia, Russia and the U.S.

Listed-company CEOs

Emerging-company CEOs

71% 62%

Adding to it

22%

Keeping it the same

28%

Reducing it

3% …with many new jobs slated for sales and IT. Emerging CEOs are even more likely to add jobs in sales and marketing. 67

PERCENTAGE OF CEOs WHO EXPECT TO ADD JOBS IN THE FOLLOWING CATEGORIES

Listed-company CEOs

Emerging-company CEOs 50

A POWERFUL ADVANTAGE Beyond the U.S., Siemens has doubled its emergingmarkets revenues since 2005, Löscher says, and continues to expand aggressively in markets such as China — although he admits that market is becoming more challenging as local engineering firms mature. “For many years, we had no serious trouble finding talent,” the CEO says, “but now we compete with Chinese companies seeking graduates as well.” Yet he says Siemens’ reputation as a global powerhouse gives it an edge when it comes to hiring. “We build the world’s biggest gas turbine, the fastest CAT scan and some of the fastest passenger trains,” remarks Löscher. “That’s how the hearts of young engineers get opened.” — Sheridan Prasso

37 33 29 26 23 13 9

Engineering HR

Marketing

Manu- Finance General facturing management

Sales

! See the NYSE magazine app for a map showing new job distribution.

N YSEMAGA Z I NE .C O M

with

DAVID A. FLYNN

NYSE EURONEXT

CEO R E POR T

The Soul of Innovation

David A. Flynn, Fusion-io’s CEO and founder, adds new efficiency to digital memory.

ENTER WOZNIAK JUST THE FACTS Headquarters Salt Lake City

Revenue

$197.2 million (fiscal 2011)

Market cap* $2.2 billion

Employees 430

Listed since June 9, 2011

*AS OF 10/17/2011

That mindset led to a more straightforward memory design using solid-state drives, which helped the startup land $115.5 million in venture capital and prompted Apple Inc. co-founder Steve Wozniak to call Fusion-io’s approach “revolutionary.” In fact, the usually reticent Wozniak was so impressed that he agreed to become the company’s chief scientist in 2008. “The technology marketplace has not seen such capacity for innovation and radical transformation since the mainframe computer was replaced by the home computer,” Wozniak enthused when he announced that he would join the company. Previously, solid-state drives had been treated like mechanical hard drives, which failed to take advantage of the memory chips’ speed. “It was like trying to suck an elephant through a straw,” says Flynn. So rather than simply replacing hard drives with solidstate memory, Fusion-io’s design treats solid-state drives as if they were part of direct memory. The approach means eliminating bottlenecks in the servers and allowing the chips to operate at full speed. “We’re getting rid of the middleman here,” Flynn explains, boosting the performance of data centers by as much as 10 times without having to add more servers, according to Fusion-io and some independent tests.

By starting with a clean slate, we freed researchers to ignore the traditional design of computer systems and start afresh.” David A. Flynn

CEO, FUSION-IO

COURTESY FUSION-IO (2)

e’re moving from the information age to the media age,” states David A. Flynn, chairman, president and CEO of six-year-old Fusion-io Inc. (NYSE: FIO). He points to connected devices like smartphones and tablet computers, which have shifted the focus from building faster devices to building faster networks. “For example, consider what it takes for a program on your phone to recognize a song and tell you the title, or to do live facerecognition searches on a crowd of people in a security video over a network,” Flynn suggests.

When co-founding Fusion-io, Flynn observed that data centers delivering information to these connected devices needed to run more efficiently to meet future demand. So, armed with a BS in computer science from Brigham Young University and experience in software research and development, Flynn, 34, realized that researchers needed to rethink the basic design of current computers. “We had to eliminate complexity,” says Flynn. “By starting with a clean slate, we freed researchers to ignore the traditional design of computer systems and start afresh.”

S IG HT IN S EY RV SU As more people use more portable devices needing even faster access to information, demand from corporate enterprise customers is growing. “We now have over 2,000 clients,” says Flynn, “from Facebook to Wall Street.” Fusion-io reported fourth-quarter 2011 revenues of $71.7 million, up from just $10.9 million for the same period the previous year, and a net income of $5.8 million, compared with a net loss of $11.9 million in the same quarter in 2010.

MEMORY FOR ALL Flynn credits an important decision made early on with putting Fusion-io on the fast track: The company would work with all current systems on the market. Because it is agnostic when it comes to different operating systems, says Flynn, Fusion-io’s products have been widely adopted by hardware makers such as IBM Corp. (NYSE: IBM) and Hewlett-Packard Co. (NYSE: HPQ). “This is why we have some of the leading operating systems experts on staff,” says the CEO, explaining that the company’s 430 employees include experts in Linux, Oracle Solaris, Windows and Apple’s OS X. Flynn says two competing trends will keep Fusion-io humming. In addition to the major shift to cloud computing and the accompanying vast memory storage that requires, he explains, a number of Steve Wozniak customers are taking back their own comCHIEF SCIENTIST puter storage. They can do this, he says, because Fusion-io’s memory systems require fewer servers and thus less overhead. “Essentially,” he observes, “they are creating their own private clouds.” The company continues to look for ways to squeeze even more performance out of its technology, partly through acquisitions. Using part of the $222.7 million it raised through its June IPO, Fusion-io recently purchased IO Turbine Inc., a software company specializing in using flash memory in virtual memory designs. Flynn expects Fusion-io’s breakthrough to catalyze innovation as improved data-center performance allows customers to create new services. And he expresses no doubt that other aspects of existing networks need improvement. “Now,” says Flynn, “with processors running at full speed without the memory drag, the speed of Internet connections becomes a bottleneck again.” — John R. Quain

CATALYSTS FOR IDEAS R&D departments are busy: CEOs of listed corporations are generally satisfied with their company’s level of innovation, and emerging-company CEOs are really happy. Nearly one out of three entrepreneurs and 10 percent of listed-company CEOs plan to up their R&D budgets through 2012. Both groups feel that communicating stories of success spurs innovation, but MBAs also embrace nontraditional catalysts such as hiring a global workforce and crowdsourcing. Non-U.S. CEOs are four times as likely to credit social media as a source of ideas, while U.S. CEOs are more apt to embrace acquisitions.

Most are satisfied with their company’s level of innovation… Twice as many emerging-company CEOs are “very satisfied.”

Very satisfied

22%

Somewhat satisfied

65%

Not satisfied (NET)

44% 43%

13%

LISTED CEOs

EMERGING CEOs

87%

VERY/SOMEWHAT SATISFIED (NET

…but the groups express differing views on how best to spur innovation. Listed-company CEOs Emerging-company CEOs MBA students

MOST EFFECTIVE WAYS TO SPUR INNOVATION...

10%

20%3 %30%

40%

50%

60%

Communicating stories of innovation success within the organization New employees Acquisitions Employing a diverse global workforce Providing employees with time to focus on furthering innovative ideas Use of external consultants Generating ideas through crowdsourcing or other social media Providing employees with sabbaticals to explore new ideas

N YSEMAGA Z I NE .C O M

with

TOM EVANS

NYSE EURONEXT

CEO R E POR T

B A N K R AT E

Digital Change Agent High-profile media veteran Tom Evans remakes Bankrate for a connected world.

Headquarters North Palm Beach, Fla.

Revenue

$300 million (2010 pro forma)

Market cap* $1.7 billion

Employees 360

Listed since June 17, 2011

*AS OF 10/17/2011

N Y S EM AG A Z I NE .C O M

I found the new online business environment more similar than different from the print business.” Tom Evans CEO, BANKRATE and mortgage information from 4,800 financial institutions in 575 markets in 50 states. Furthermore, Bankrate has added information on CD rates, savings accounts, credit cards, insurance, car loans and many other financial topics through a network of sites. To this raw data, the advertising-supported Bankrate adds tools such as glossaries and calculators for refinancing. “We cover 300 different

MEREDITH JENKS

JUST THE FACTS

ou can’t fight change,” says Thomas R. Evans, CEO of Bankrate Inc. (NYSE: RATE). “You’ve got to find a way to embrace it.” For Evans, 56, those words are something of a mantra. In 1998, after 20 years in print publishing that included serving as president and publisher of U.S. News & World Report, Fast Company and The Atlantic, he became CEO of GeoCities, a pioneer in popularizing personal Websites. (Evans eventually brought the company public in 1998, and a year later Yahoo! Inc. purchased it.) Evans was surprised by how much he could apply the fundamentals of print journalism to the Web. He says the skills needed to create content, present it to an audience and match it to an advertiser are just as relevant online as they are in the print world — despite what he calls a bias in digital circles against traditional media veterans: “The attitude in the online world is ‘Don’t let any of the old guys in because they’ll ruin it.’” Instead, “I found the new business environment more similar than different — the basics still apply,” he says. When Evans joined Bankrate in 2004, the brand had roots going back 35 years. The company had built a reputation for delivering reliable, objective mortgage and lending rates through national weekly newsletters and licensing of its content to outside users, such as broadcast and print news outlets. In a shrinking print publishing market with ever-increasing paper costs and declining ad revenues, Evans recognized that the company could reach a much bigger market online. Another advantage? “The delivery cost is almost zero.” But to really make the push into the online world, Evans believed, Bankrate needed to become more consumer focused — without abandoning its core competency. Today, Bankrate’s roughly 360 employees reach 150 million unique visitors per year by amalgamating up-to-the-minute lending

S IG HT IN S EY RV SU products in 600 different markets and offer 125 different calculators,” Evans says. The diversification has apparently worked, according to the company’s 2011 Q2 SEC filing: The $197.5 million total revenues that the company reported for the six months ended June 30 is 172 percent higher than its total during the same period last year. Bankrate’s June IPO raised $300 million. To further Bankrate’s online expansion, Evans says, he deploys these tactics: • Diversify through acquisitions. Bankrate reports recent strategic purchases of $145 million for CreditCards.com Inc., which lets consumers shop for, compare and apply for credit cards online, and $205 million for NetQuote Inc., which provides information on insurance. The company also bought Nationwide Card Services Inc., which helps financial services firms market credit cards online to consumers and small businesses. • Don’t just aggregate information — verify and customize it. “Information has to be credible,” Evans stresses. Bankrate independently vets the interest rates and other pricing data that banks and other financial institutions advertise to confirm the rates’ availability. Today’s well-informed consumer would quickly become disillusioned if Bankrate’s information proved faulty, Evans says. The ability to customize information to suit a particular visitor’s needs is a big advantage offered by the digital realm, he adds, noting that “everything is inherently local.” A consumer needs to see the best 30-year fixed rates in his area from local lenders. • Follow digital trends selectively. Bankrate offers smartphone and tablet applications but has kept them simple for now, says Evans, knowing how and where consumers tend to access certain information and recognizing their privacy concerns. “If you’re getting a mortgage, you probably don’t want to do that walking down the street,” Evans explains. And while the company notifies consumers about new interest rates via its Facebook page, it has not invested in functionality that would, for instance, allow users to share their progress in meeting personal goals, the way a fitness site might. “People are relatively private about their finances,” he says. — John R. Quain

STAYING CONNECTED CEOs are becoming increasingly comfortable with the digital realm. Eight in 10 listed-company CEOs single out Websites as their most common source of business information — 89 percent of emerging-company CEOs and 83 percent of MBAs agree. Most executives supplement digital fact-finding with peer conversations and reading print publications, while emerging-company CEOs and MBA students are more likely to access business blogs, Twitter streams and TV. Hefty majorities of all groups say social media will affect the way companies do business in the future and also will play a major role in customerrelationship management, but few have digital strategies.

All three groups expect social media to significantly affect the way they will do business in the future… Emerging CEOs and MBAs are particularly sold on social media.

PERCENTAGE WHO AGREE THAT SOCIAL MEDIA WILL HAVE A MAJOR IMPACT ON HOW COMPANIES DO BUSINESS IN THE FUTURE

79%

91%

Strongly agree 31%

Strongly agree

38%

Strongly agree 43%

Somewhat agree 53%

Somewhat agree 48%

Somewhat agree 48% Disagree

Disagree

LISTED CEOs

Disagree

EMERGING CEOs

MBAs

…yet few CEOs have developed a social media strategy. Listed-company CEOs

PERCENTAGE WHO...

Emerging-company CEOs

13% 29%

18% 26%

actively use social media and have a strategy in place

actively use social media but are still developing a strategy

26% 16% are not using or exploring social media but may do so in the future

34% 27%

are committed to social media use but have yet to implement a strategy

have no interest in social media today or in the future

N YSEMAGA Z I NE .C O M

with

DAVID LIU & CARLEY RONEY

NYSE EURONEXT

CEO R E POR T

XO GROUP

Why Branding Matters

JUST THE FACTS Headquarters New York City

Revenue

$112.9 million (2010)

Market cap* $259.1 million

Employees 605

Listed since June 28, 2011

*AS OF 10/17/2011

ven before Carley Roney and David Liu launched Web portal The Knot in 1996, the wife-and-husband team believed that the brand must be the message. “Without a brand, people can take your business model and beat you on every level,” says Roney, chief content officer at parent company XO Group Inc. (NYSE: XOXO). “But a brand that rings true is a huge advantage in keeping consumers loyal.” Indeed, The Knot Wedding Network, which includes the Websites TheKnot.com and WeddingChannel.com, has attracted nearly 2 million members. Along the way, XO Group has developed The Nest for newlyweds and The Bump for first-time parents. National and local publications, books, social and mobile applications, and television programs deliver the brands by whatever medium brides, new homeowners or expectant parents choose. To better reflect the expanded role that its brands occupy in customers’ lives, The Knot changed its corporate name to XO Group in June when it transferred its stock listing to the NYSE. This new corporate umbrella, though not its own brand, says CEO Liu, makes it easier to expand with a name that is still unmistakably linked to the happy events of life.

BEYOND TECHNOLOGY Liu and Roney, who met as film students at New York University, credit their nontech backgrounds as the driving force throughout the company’s 15year history. “At a lot of online businesses, the technology is the most important thing and the brand is often the afterthought,” explains Liu. To stand out in an already crowded field, Roney and Liu vowed to keep their site cool by addressing real-life issues. “We wanted to provide wedding advice your best friend would give you as opposed to your mom or the prim etiquette lady,” says Roney. 26

N Y S E M AG A ZI NE .C O M

In planning their own wedding in 1993, the pair had experienced dilemmas that come with a cross-cultural marriage, and they knew that other couples were grappling with similar issues and more. “Traditional wedding sites just weren’t addressing second marriages, divorced parents and kids from previous relationships, yet that stuff was happening in the real world,” Roney says. The partners drew up a list of about 250 names. “The first one we came up with was The Knot,” recalls Roney. “We kept returning to it because it was edgy and memorable — you know, tying the knot.” Liu and Roney completely overhauled the concept of wedding publications with The Knot magazine. Rather than randomly placing ads of wedding gowns throughout the magazine, The Knot runs ads alphabetically, with each designer listing the gowns’ price range. “Brides typically buy wedding magazines for the gown ads, so why not make it as easy as possible for them?” Roney asks. “Listing prices meant that they weren’t going to fall in love with dresses they couldn’t afford.” Although she says advertisers were skeptical, “once brides began coming to their showrooms with pages ripped from our magazine, they knew it was working.” “Consistency in message and execution is so important when building a brand,” adds Liu. For example, the partners vetoed a weight-loss product advertising deal. “Our Website and magazines have always been accepting of women’s different body types,” says Roney. “An ad like that is simply not consistent with what our customers expect.” Still, a little flexibility in the business model doesn’t hurt. “Our original plan called for launching a new brand every six months,” says Liu, who credits the 10 years it took to build The Knot for the success-

JOÃO CANZIANI

The founders of The Knot wedding site say creating a presence that consumers identify with is key to continued success.

S IG HT IN S EY RV SU

LIVING UP TO YOUR NAME Nearly all CEOs surveyed view reputation management as part of their overall enterprise risk-management program. That said, most respondents from emerging companies, and more than a third of listed-company CEOs and MBA students, say trust in public businesses is declining. Respondents are split on whether CEOs do enough to protect their companies’ reputations, with six in 10 MBA students saying they don’t. CEOs aren’t overly satisfied with the returns on their brand investments, with just 26 percent of listed-company CEOs and 23 percent of emerging-company CEOs saying the brand’s ROI has met expectations.

The three groups think trust in publicly traded companies is decreasing… Emerging-company CEOs are the most negative. PERCENTAGE WHO SAY TRUST IS...

At a lot of online businesses, the technology is the most important thing and the brand is often the afterthought.”

Increasing

Decreasing

35%

David Liu CEO, XO GROUP with Carley Roney CHIEF CONTENT OFFICER ful launch of The Nest in 2005 and The Bump two years later. He says online forum comments on The Knot showed how intensely users wanted information about the next logical life stages: setting up a home and becoming parents. The branding of these offshoots had to clear the same hurdles as The Knot: to be edgy and slightly off-center. “People have an ‘aha’ moment when they hear The Knot, The Nest and The Bump,” says Roney. “They take a second to get, but you never forget them.” The company recently launched Ijie.com (which translates to “love knot”) to provide Western inspiration and local advice for weddings, relationships and pregnancy for the Chinese consumer. “A generation in China is seeking inspiration from Western brands and wants to reaffirm these very important events in their lives,” Liu says. The pair have also had discussions with investors in India, Europe and South America. After all, adds Roney, “falling in love, getting married and starting a family cuts through all cultures.” — Susan Caminiti

20%

32%

35% 56%

LISTED CEOs

EMERGING CEOs

MBAs

…yet most listed-company respondents think CEOs do enough to protect their companies’ reputations. Emerging-company CEOs and MBAs don’t agree. PERCENTAGE WHO THINK THAT...

Yes, CEOs do enough

No, CEOs don’t do enough

63%

43%

39%

37%

57%

61%

LISTED CEOs

EMERGING CEOs

MBAs

N YSE MAGA Z I NE .C O M

Lars Dalgaard founded SuccessFactors after recognizing that employees respond better when they are heard.

love work agaın Lars Dalgaard says happy employees are a company’s No. 1 competitive advantage — and SuccessFactors has the software to make them content. By

SUSA N CA MI N I T I Photographs by Jonathan Sprag ue

N YS E MAGA Z I NE .C O M

SUCCESSFACTORS

believe that every human being can be happy at work and do amazing things if their company takes time to connect with them.” So says Lars Dalgaard, founder and CEO of SuccessFactors Inc. (NYSE, NYSE Euronext: SFSF), the Web-based talent-management software company. What’s more, he says, “the corporate world is concluding that happy employees are productive employees.” Noting that SuccessFactors’ slogan is “It’s time to love work again,” Dalgaard says his San Mateo, Calif.-based firm can help businesses attract the best employees — then get the best out of them once they’re onboard — by tracking performance against measurable goals. To Dalgaard, feeling the love begins with managers sitting down with subordinates regularly and explaining things clearly. Then (and this is the key, he believes) they really listen to how each employee sees the challenges of the job and provide the resources and freedom to get it done. “If managers did that,” he says in a booming voice still tinged with his native Danish accent, “employees could do not two times more, but 50 times more than they ever dreamed possible.” The six-foot-four Dalgaard, 44, is a self-professed “hyperaggressive” businessman who started SuccessFactors in 2001 after holding senior positions at Unilever NV (NYSE: UN; NYSE Euronext: UNA, UNIA) and Novartis AG (NYSE: NVS). His experiences with his bosses and the people he managed at both companies proved to him that unmotivated employees are toxic to productivity, but happy workers are a company’s most potent competitive advantage. He believes that organizations are starting to realize they need to shore up employees at every level. “A bank wants its tellers to do a very strong job every day,” Dalgaard says. “But it wants the head of its investment banking operations to really outperform.”

Seventy-three venture capitalists told me what I envisioned couldn’t be done, and three told me I was stupid for trying.” Today more than 3,500 customers, including The CocaCola Co. (NYSE: KO), FedEx Corp. (NYSE: FDX) and Toyota Motor Corp. (NYSE: TM), in 168 countries have signed on to use SuccessFactors software products as a way to unlock employee potential. Fiscal 2010 revenue of $206 million rose 35 percent above the previous year’s, and analysts estimate 2011 sales of nearly $314 million, a 52 percent increase. Robust investments in sales and marketing, R&D and five acquisitions over the past 18 months (see “A Rousing M&A Strategy” at nysemagazine.com/sfsfstrategy) have helped Success30

N Y S E M AG A ZI N E.C O M

President Doug Dennerline expects growth even in a nonhiring environment when “companies want to get the most out of their workers.”

Factors lay the right foundation for a bright future, Dalgaard says. “SuccessFactors is aggressive — its approach to working with the HR function is ‘we’re going to the CEO or CFO and you’re coming with us,’” says Josh Bersin, CEO at Bersin & Associates, a human resources research and consulting firm based in Oakland, Calif. “It’s a good strategy.” Indeed, Deloitte LLP recently named SuccessFactors the fastest-growing public software-as-a-service (or SAAS) company in North America.

A NEW WORLD OF TALENT For decades companies depended on HR software, installed on-site by giants such as SAP AG (NYSE: SAP), to keep tabs on the basics of employee life. Beginning about 10 years ago, talentmanagement applications began to replace the legacy systems. Accessed inexpensively through the Internet, or cloud, such ondemand, Web-based software allows managers to be more precise and proactive about hiring, training, promoting and educating their workforce. Bersin, who estimates the talent-management software market now hovers around $3 billion, expects annual growth of up to 15 percent in each of the next several years. Doug Dennerline, who joined SuccessFactors as president late last year following careers at Cisco Systems Inc. and Salesforce.com Inc. (NYSE: CRM), expects growth regardless of macroeconomic conditions. “In a nonhiring environment like we have now, companies want to get the most out of the workers they have,” he says. “When hiring picks up, our recruiting applications will become more popular.” Indeed, SuccessFactors comes out with new HR applications every three months or so, based on constant conversations it has with customers and the issues they are facing.

To see a video of Lars Dalgaard discussing SuccessFactors’ philosophy, download our latest tablet edition.

“Whether they had been previously shot down by their parents, For instance, a discussion with a customer revolved around schoolyard bullies or bad bosses, people just wanted a clear, how to make performance reviews less subjective and more honest conversation about what was expected of them and how I uniform throughout the organization. “If a manager gives out would support them in getting things done.” all 5s on a scale of 1 to 5 and another manager awards only 4s, Dalgaard, who is quick to point out that he’s does that mean her people are inferior performnot “a mushy, ‘how-are-the-kids?’ kind of guy,” ers, or is it just easier to get a 5 with the other tried his approach with his staffs at Unilever and manager?” asks Dennerline. Thus was born the Novartis. “People were excited and getting things Calibration software application, one of Successdone that they had never dreamed they could Factors’ fastest-growing products. do because no one ever gave them the tools and Dalgaard admits to some failed products but freedom before,” he says. “That’s when I knew doesn’t agonize over them. “You’re not going to LARS that I needed to do this on a bigger scale.” change anything on the planet if you don’t make DALGAARD He says he created the first simple version mistakes and learn from them,” he says. CEO, SU C C E SS FAC TO R S of SuccessFactors software inside Lotus Notes The more important point, he says, is that after he left Unilever in 1998. “Technology was in good times or bad, “managers need to give IF I COULD MEET MY 20-YEAR-OLD SELF, becoming a more meaningful tool, and I saw the employees clarity and purpose, a sense of what I WOULD SAY... tech platform as a way to design software and needs to be done today and the career path to Be humble. Be honest. bring it to multiple companies,” Dalgaard says. take them to the next level. If you motivate peoDon’t be afraid of Though he claims that “73 venture capitalists ple properly, not just with money but also with making mistakes. Don’t told me what I envisioned couldn’t be done, and a sense of purpose, they will execute for you and do anything you don’t feel is “wow!” three told me I was stupid for trying,” Dalgaard take your company way ahead of competitors.” raised five private investment rounds before takAn example of how SuccessFactors says it MY PERFECT DAY OUTing the company public in 2007. SuccessFactors helps customers provide a sense of purpose is SIDE WORK INVOLVES... launched its first product in September 2001. “We its Goal Management software. Simply put, Reading, discovering, art, my family, my friends and did $10 million in sales with 10 customers that the application helps everyone in the organizasurprising moments. first quarter,” he says proudly. As part of its growth tion understand where the company is headed strategy, the company transferred from Nasdaq and each person’s role in making it successful. THE BEST ADVICE to NYSE earlier this year, cross-listing on NYSE Managers can assign employees — from cashiers I COULD GIVE A YOUNG EMPLOYEE IS... Euronext Paris and the Frankfurt Stock Exchange. all the way up to the most senior executives — Don’t spend a second on While Dalgaard certainly has plenty to say measurable goals and tasks that are visible to anything you don’t feel about how his customers should treat employees, others in the company. Employees can see online strongly about. he’s equally outspoken when it comes to his own how their goals connect with the broader corpoMY BIGGEST PET PEEVE team of about 2,000 employees. Company headrate strategy and how their day-to-day responsiIN THE OFFICE IS... quarters has no offices, and conference rooms bilities contribute to what the company is trying People who have a meethave glass walls. His desk is smack in the middle. to achieve. They can even type in updates and ing in the meeting. Have it “There’s a tremendous energy in the place, and comments on their own goals or those of others. after the meeting. people feed off of that,” Dennerline says. According to his employees, Dalgaard practices CONNECTING WITH PEOPLE what he preaches. SuccessFactors was named Dalgaard, who holds an MS from the Stanford one of the Top Workplaces in the San Francisco Bay Area this year Graduate School of Business, settled in the U.S. in 1998. From the based on an employee survey from the Bay Area News Group. time he was 12 years old, he says, he knew he’d run his own comDalgaard believes the biggest challenge his company and pany, because “I couldn’t stand taking direction from someone else.” others face is keeping the focus on people in good times and Although he may have bristled at authority, Dalgaard knew bad. On a recent trip, he stopped at a watch kiosk in an airport. how to get things done within organizations, rising from “bottle “The salesman was on his cell phone and just ignored me,” he washer to country CEO,” first with pharmaceutical company recalls. “He lost that sale. You have to build a culture that makes Novartis and later with consumer-products giant Unilever. Though employees give a damn. If you don’t care about them, they’re not his jobs took him all over the globe, he observed a common trait going to care about your customers.” among employees. “They wanted to be heard,” Dalgaard says.

IN MY OWN

WORDS

N YS E MAGA Z I NE .C O M

For an in-depth interview and the story behind Buffett’s purchase of Business Wire in 2006, download the app or visit

nysemagazine.com/buffett.

IN WARREN’S WORDS

The Berkshire Hathaway chairman offers 10 insights. NYSE magazine caught up with Berkshire Hathaway Inc. (NYSE: BRK. A, BRK.B) Chairman Warren Buffett and BusinessWire CEO Cathy Baron Tamraz at the NYSE during the 50th anniversary celebration of BusinessWire. Berkshire Hathaway bought BusinessWire, a global press release distribution and IR newsroom service that fulfills disclosure responsibilities for listed companies, in 2006.

On the U.S. business recovery Unemployment is bad, and the housing market lacks recovery. Other than that, the return on tangible equity is terrific right now. American businesses are very close to record earnings this year.

On the housing market When you have a huge bubble in the most important asset that Americans have, you cannot get over it in a day. We need to eat up our oversupply, produce fewer homes and increase households. We are lucky we have a growing population in this country.

On government stimulus Washington can do less than what you think. Monetary and fiscal policy tools have already been deployed, and we don’t have a lot of gas left in the tank to move the economy along. However, the natural generative capacity of capitalism is the biggest factor we’ve got going for us, and it is working.

On restoring confidence The handling of the debt-ceiling crisis magnified the dysfunction within our government and weakened the confidence of Americans in their government’s ability to get things done. This, plus 9 percent unemployment, is making it hard to restore confidence.

On regulation Leverage is bad for society. You need something to control the human impulse to use governmentguaranteed paper. If I had been designing regulations post Lehman Bros., I would have restricted the powers of the individuals in charge and made damn sure they faced terrible economic consequences

The natural generative capacity of capitalism is the biggest factor we’ve got going for us, and it is working.” — WARREN BUFFETT

if the institution they were in charge of failed. We don’t want a replay of 2008.

On the crisis in Europe It is unfortunate that the E.U. nations gave up their rights to print their own currencies. The system needs to either bring the member states closer, to more of a confederacy, or go back to what used to be. It will definitely be different in a few years. But that does not change my view about the desirability of doing business in Europe.

On China What’s happened in China blows my mind: the way it is churning out goods and services, and how the quality of life for the average citizen is galloping now that the system permits the Chinese people to realize their potential.

On shareholder communications I don’t believe in treating institutions differently from individual shareholders. Each gets the same information from us at the same time with the same degree of candor. I’ve found that the most efficient way to do this is through the written word. We also encourage people to come to our annual meeting. We want shareholders to own Berkshire Hathaway for the rest of their lives.

On investing Investing is the act of lending money now to get more later. Don’t let problems on a given day distract you. The trick is not to lose sight of the long term.

On the Buffett Rule It was my boyhood dream to have a tax named after me. Seriously, the tax system war has been waged, and my class has won. I’d rather we get $20 billion in taxes from 50,000 ultrarich Americans who pay at unfairly low rates than from 20 million Americans. — As told to Jeanne Cotroneo Darrow

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