Some months ago, I ordered a copy of “Swanson’s Unwritten Rules of Management,” a free book by William Swanson, the CEO of US military contractor Raytheon Company, from the company’s website.
It hasn’t arrived yet and it now looks as though I won’t ever be getting a copy.
News today via the New York Times that Mr Swanson plagiarised much of the content of his book from another author’s work published in the 1940s.
The NYT says his action has cost him dearly:
Raytheon directors punished the chief executive, William H. Swanson, by taking away almost $1 million from his 2006 compensation yesterday because he failed to give credit for material that was in a management book he wrote. Mr. Swanson’s pay cut will come in two ways. His 2006 salary will be frozen at its 2005 level and his 2006 restricted stock award will be reduced 20 percent, Raytheon said. The cuts would come to nearly $1 million according to a person close to the board, who was granted anonymity because he was disclosing proprietary information.
In 2005, Mr. Swanson received a salary of $1.12 million and restricted stock valued at $2.96 million. The board acted before the annual shareholders meeting yesterday afternoon in Arlington, Va.
The punishment also comes as Raytheon has stopped circulating the book, “Swanson’s Unwritten Rules of Management,” a folksy book that turned Mr. Swanson into a management sage and earned him praise from business leaders like Jack Welch and Warren E. Buffett. Raytheon, a leading military contractor, had given away more than 300,000 copies of the book and had promoted it on its Web site.
But what price reputation? The Raytheon board say they have full confidence in Mr Swanson as CEO. I wouldn’t bet on his longevity in that job now.
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So that’s why I haven’t received anything. I was thinking not too long ago, “what happened to that book?” after ordering it quite a long time ago as well. Now I know.
And I agree with your view, I wouldn’t bet on him remaining there for long either.
I wonder if he plagiarized it, or if the flack he hired to ghost it for him plagiarized it.
Whether he stays or goes is neither here nor there. 20% sounds a lot, but if you’re receiving a seven figure compensation package then a year or so with reduced benefits is hardly a problem – is it? Unless you’re an inveterate gambler.
Having said that – if I’d been publicly humiliated in the same way then I’d crawl under the nearest rock but since we’re taking miltary contacting here then maybe a brass neck is a real asset?
You’re missing the primary point here, Dennis. The book was advertised as Swanson’s work. In press interviews about it, Swanson maintains that line. Turns out that he filched much of the content from someone else’s work. If he lied about that, what else is there that might be suspect regarding Swanson’s actions as CEO of his company?
So he’s taken a personal financial hit as punishent by his board of directors. The least you’d expect to happen in a post-Enron business world.
I’d expect to see a leadership change before the end of this year.
Neville,
A couple of things to note:
First, the whole debacle was sparked by a blogger, as I noted in my coverage.
Second, Swanson’s response to the accusation did give a believable explanation. Essentially, his answer is that he is human and has been writing these rules over the course of 30 years.
If he did not attribute the source of each rule, it was not intentional, but rather a result of having forgotten where he got the ideas from.
That’s his story, and clearly those who know and like the guy are willing to give him the benefit of the doubt.
From what I understand, about half of the content was plagiarized, though the CEO does not admit that. Whether it was word-or-word copying or a rewrite, I don’t know because I don’t have copies of both books.
My worry about your speculation that he will be fired or rendered ineffective as a leader is that it does not leave any room for CEOs to be human or to make mistakes.
Dominic, the NY Times has a comparison of both books which shows that “fifteen of the rules use almost identical language.” The plagiarism charge certainly looks proven, whether Swanson admits it or not, borne out by the subsequent action of the Raytheon board.
If Swanson had just come out with it and said, “Yes, I did do it, I screwed up, sorry…” then my own opinion would have been markedly different. Instead we have a corporate press release and the board’s action.
The first four paras in your post highlighting how this story began before the Times picked up on it are illustrative of what can happen if a company (Raytheon in this case) isn’t paying attention to blogs. Imagine if the PR people had seen Carl Durrenberger’s post and if someone (Swanson ideally) had left a comment there with Swanson’s side of the story.
A wholly different story would then have emerged.
If Swanson had just come out with it and said, “Yes, I did do it, I screwed up, sorry…” then my own opinion would have been markedly different. Instead we have a corporate press release and the board’s action.
That corporate release simply quoted Swanson. Further, he is seen to respond more directly here: http://wwwxt.raytheon.com/communications/whs_rules/
You get access to the above page via his bio.
Granted it doesn’t say, “I stole them, I shouldn’t have, I’m sorry.” But it does openly admit that they he must have gotten them from the earlier book, that he didn’t acknowledge the author, and he tries to explain how it happened, which is quite plausible.
Afterall, how much of what any of us write or think is truly original? Not much. Do we always remember where we got the ideas from? No.
Seeing the comparison, I’m confused why they would stop distributing Swanson’s book. Surely all he needs to do is acknowledge his source/s. As he states, it’s not the source of the rules so much his endorsement of them that is important to his book.
I agree that Raytheon should have been monitoring blogs, but I doubt that would have stopped the issue being picked up by the New York Times. It may have made the company seem more responsive, but that’s about it.
But I disagree with you that it is over for Swanson. Unless there are other revelations to come, it’s not Swanson’s swansong (he, he). He can use this to his advantage. It certainly helps him speak with authority on the topic.
Often it’s not what you did wrong in the first instance, but rather how you deal with the fallout. I’m willing to give Swanson the benefit of the doubt based on his explanation for how it happened, how he handled the issue when it broke in the news, and how the board punished him for it with a $1 million penalty.
But it is not water under the bridge. He must use this experience to learn and teach. I think he has a great opportunity to take this experience and use it to strengthen his reputation. I could imagine him using it in speeches (or perhaps even on a blog) to discuss the issues of integrity and ethics in leadership.
That would make this incident one of the better things to happen to him.
Dominic, notwithstanding the (rather lame) statement he made, with an air of corporate PR polish about it, I’m quite sure he has suffered damage to his personal and business reputation in the eyes of many people. Who knows what affect that may have on his future as CEO, never mind what the board have publicly said re support for him. And what affect it might have on perceptions of Raytheon.
I think the situation was compounded by withdrawing the book. Equally, I cannot see what else the board could have done given the seriousness of the personal and public punishment meted out to Swanson.
You also get a sense that the NYT was digging deeply. So the overall impression I gain from reading the copious material the NYT has published about this, and seen elsewhere (CFO magazine, for instance), adds up to a feeling that perhaps some major corporate wrong-doing was afoot somewhere.
You’ve highlighted some of the things Swanson could do to turn this debacle into something that could positively alter any perceptions that he simply plagiarised someone else’s work and, therefore, is a leader of a publicly-listed company whose personal ethics you would question (with, therefore, major concerns about his business ethics). You’ve nailed it here:
Absolutely right. A terrific opportunity to turn this into a matter that could actually enhance his reputation by illustrating his humility. So he becomes a real person! He engages directly with people (a blog would certainly be helpful for this) and shows a much more human face for his company.
So it is not all over yet for Swanson. If nothing happens, though, I wouldn’t be surprised at all to read sometime this year that Raytheon has a change in leadership.
I think that Dominic is (rightly or wrongly) trying to give Swanson the benefit of the doubt. This is possibly an admirable thing.
However, my take is that the evidence suggests that this was NO accident or oversight. Not only are many of the previous book’s rules copied VERBATIM, but some of the other rules were copied from other sources as well (Rumsfeld’s Rules and Dave Barry’s book, Dave Barry Turns 50).
Mere oversight does not explain this level of plagiarism. Add to that the obfuscation surrounding his “apology” and a very unflattering picture of the man (and his board of directors) emerges.
More on this here.
That’s my feeling, too, from reading the NYT’s and other reporting – the apology statements seem less than heartfelt and genuine and more the result of the kind of damage-containment exercise you see from large corporations. A great pity.
Funny: Guess what just arrived in the mail? Yes, you guessed right, the booklet.
It has a return address in the US but seems to have been sent from Germany. No date on it, so I don’t know when it was sent.
You might still receive yours then after all…
Armin, when I arrived back home last night there was a package waiting. Yep, the little bookl. The five copies I’d requested. I’d planned to send a few to some clients. Not too sure about that now…
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