Following is a letter sent to the Editor of the Financial Times:It is very good news when a senior manager of a financial institution who has presided over billion euro losses decides to take some responsibility! We have not seen enough of this in Europe (“Bouton to step down as SocGen chief” FT April 17 2008)Keeping the chairmanship is hardly stepping down and taking responsibility.The fact that the executive team heading up Société Générale could secure additional capital from shareholders after having let a junior executive run up billion euro losses continues to amaze and raises questions about shareholders who, not only don´t hold their managers to account, but reinvest their capital for these same managers to mismanage, raises questions about some fund managers as well.If...
Anybody with the slightest training or even interest in business strategy is probably familiar with Michael's Porter's famous 5 Forces Model. It would be no exaggeration to say that this model fundamentally re-defined the field when it was first published back in 1979. Here's a link to a short interview with him (12:57 minutes) on the relevance of the 5 Forces in today's world. Well worth watching. The page also has a link to an article by Michael Porter in the January 2008 Harvard Business Review, updating his model.See...
Accounting techniques like budgeting, sales projections and financial reporting are supposed to help prevent business failures by giving managers realistic plans to guide their actions and feedback on their progress. In other words, they are supposed to leaven entrepreneurial optimism with green-eye-shaded realism.At least that's the theory. But when Gavin Cassar, a Wharton accounting professor, tested this idea, he found something troubling: Some accounting tools not only fail to help businesspeople, but may actually lead them astray. In one of his recent studies, forthcoming in Contemporary Accounting Research, Cassar showed that budgeting didn't help a group of Australian firms accurately forecast their revenues. In a second paper,he found that the preparation of financial projections...
An important way of doing things right and which does not penalize financial results, in an industry notoriously lacking in management talent.Onésimo Alvarez-MoroSee article:Financial institutions are notorious for responding to market shocks in a herd. They are driven to this behaviour by complex but flawed risk-management models that assume little interaction between the individual institution and other players in the market. Yet in spite of this impulse to conformity, the risk-management performance of banks in this credit market turmoil is anything but herd-like. What is striking is the sheer variability of outcomes.At one end of the spectrum Goldman Sachs sails sublimely on, churning out ever-improving earnings figures while offsetting losses on its exposure to the subprime market...
Is your organization really equipped to deal with knowledge workers? Make sure you're not hung up on outmoded concepts that don't serve today's workforceRemember the phrase "Atomic Age?" Sounded so modern and zippy at the time—and sounds so hopelessly retro now. With the workplace becoming more global and more virtual by the femtosecond, atoms are out and electrons are in. As every working person knows, we can create more value electronically in a few minutes now than our grandparents' generation of workers could do in a week. But organizations haven't caught up to the knowledge-worker reality. Way too many employers still manage their troops as though it's 1945. Is your organization clinging to any of these leftover Atomic Age leadership mechanisms? Ditch them now. They're slowing you...
Recognizing the Myers-Briggs personality types of your boss or business partners can help you get what you want in your career.Leaders are easy to recognize: They’re TJs.“The T is their preference for thinking that leads them to look at the logical consequences of all the alternatives that they face. The J, the judging, comes in and helps them get that organization to fulfill that decision—to operationalize it and to implement it,” says Allen Hammer, a consultant at Manfredo Curtis Associates, which advises companies on how to get the most out of their employees. For Hammer, helping others spot and work effectively with a TJ can mean the difference between an initiative’s succeeding or failing.Welcome to the coded world of the Myers-Briggs Type Indicator, the system of...
Once you share even a seemingly benign personal story with colleagues, people may perceive you differently—and some may question your judgmentWhen I was starting out in the white-collar world, it was a very different social environment from the typical workplace of 2007. We talked about work, work, work, with a little personal gossip thrown in now and then. From time to time, we'd say something like "I saw a good movie this weekend." People didn't bring their personal lives to the office as much as they do now.Of course, the dress codes were more formal, the use of titles was more formal, and workplaces in general were more hierarchical and buttoned-down then. I'm not complaining about the changes. But the loosening up of many workplace cultures has made it more difficult to determine...
Any board-level executive worthy of the name would like to say they have the true status of their organisation’s business performance at their fingertips. Whether they really do will depend largely on the state of the company’s business intelligence (BI) systems.The pressure on managers to make better use of company data – and better understand how their organisations are performing – has put business intelligence technologies at the top of IT spending in the last two years, ahead of security and compliance.See full Article (paid subscription...
An interesting summary of reasons for corporations to have a corporate blog. The key choice is the author or authors.Determine what you have to offer.Decide if your blog will be a marketing tool.Define your editorial vision.Consider the content.Share your thought leadership.Be a credible source.Decide who will be the writer.Choose your partnerships wisely.Learn how to engage your readers.Know what matters to your readers.See full...
How do great managers inspire top performance in employees? How do they generate enthusiasm, unite disparate personalities to focus on a common mission, and drive teams to achieve ever-higher goals?More than a decade ago, The Gallup Organization combed through its database of more than 1 million employee and manager interviews to identify the elements most important in sustaining workplace excellence. These elements were revealed in the 1999 bestseller First, Break All the Rules.12: The Elements of Great Managing is that book’s long-awaited sequel. It follows great managers as they harness employee engagement to turn around a failing call center, save a struggling hotel, improve patient care in a hospital, maintain production through power outages, and successfully face a host of other...
Following is a letter sent to the Editor of the Telegraph of London:The possibility that the senior management of Northern Rock will stay in their posts is exactly what should NOT happen (“Northern Rock board could keep their jobs”). The moral hazard of any bailout is accentuated by not having senior managers lose their jobs when they manage their companies to the point of needing a bailout.Depositors cannot be expected to be on top of these issues.The losers of any bailout need to be the senior managers and the shareholders, otherwise, why not bet the shop and, if the bet comes off, I am rewarded with millionaire bonuses and, if not, apply for a bailout and start again.The wrong message will be sent if this senior management team remains.Onésimo Alvarez-MoroSee article:Adam...
* Lying at work can be detrimental to your career * It can also ruin the workplace for your colleaguesWhen an employee rang to say he needed time off work to attend his mother’s funeral overseas, the boss, Simon Lane, felt terrible for the guy.He rang the employee to personally give his condolences, only to find the “dead” mother answered the phone.“Not surprisingly that employee didn’t come back to work,” Mr Lane, managing director of Offsite Human Resources, said.In fact he heard the man had moved interstate to get as far away from the lie as possible. See full...
As a manager, your job is to intuit the needs of your employees and give them the right combination of attention, feedback and praise to keep them motivated. But the diverse range of personalities populating today's work force sometimes makes it difficult to determine how to do that.Don't worry. Being a manager may be getting more complicated these days, but eliciting good results from your team doesn't require an advanced degree in psychology. In their book "6 Habits of Highly Effective Bosses," executive coaches Stephen E. Kohn and Vincent D. O'Connell lay out best management practices for the four most common types of people you'll find at the office: See full...
There are different types in every workplace. Some more difficult to manage than others.The issue for managers is providing the right mix of feedback and attention to the different personality types. And with workplaces becoming more and more diverse, that's becoming a challenge.The Wall Street Journal's CareerJournal.com has broken them down into four different types:* The "get it done" type: The work horse. Totally focused even if it means inadvertently trampling on others in the way. Little time for casual chit-chat and long meetings. Diligent and results-focused but short on patience.* The "get it right" type: Focused more on perfection than meeting deadlines, on details rather than the big picture.* The "get along" type: Less concerned with deadlines and details than with social...
Self-interest and social responsibilityIn 1970, US economist and Nobel Prize winner Milton Friedman said in an article in the New York Times Magazine that "the only social responsibility of companies is to increase their profit", because, as Mr Friedman put it, "The business of business is business". According to Mr Friedman, a profitable company is also a socially responsible company, because it creates employment that is taxed and from which society therefore benefits greatly.Mr Friedman’s point of view has been under heavy criticism and characterised as immoral and cynical. But today, I will venture to assert that Mr Friedman is right that "the business of business is business". However, I will also claim that companies’ acceptance of corporate social responsibility (CSR) does not...
Ford is thinking about speeding up cost cuts? Does this mean that they see ways to do it but are just thinking about it?After so many billions in losses in a more and more competitive market, they are still contemplating their navels.It looks like Ford´s new management is taking their lead from the old, Mr. Bill Ford himself, who has never seen a delay in decision making he didn't like.Always too little too late from Ford.Onésimo Alvarez-MoroSee article:Ford Motor Co may accelerate cost cutting if a slowing U.S. economy puts the auto maker at risk of missing key financial goals in 2008 and 2009, the Wall Street Journal reported in its online edition on Tuesday, citing an interview with an executive."There's more risk than there is opportunity going forward" for the U.S. auto market...
In The Self Destructive Habits of Good Companies ... And How to Break Them (Wharton School Publishing), Jagdish N. Sheth, a marketing professor at the Goizueta Business School at Emory University, analyzes why companies that are at the top of their industry suddenly disappear from the landscape. He maintains that successful companies fall prey to complacency, arrogance, competency dependence, competitive myopia, territorial impulse, volume obsession and denial, and he then goes on to suggest ways companies can change course and avoid these traps. As Sheth notes in his introduction, "My view is that most companies can survive forever if they recognize and take steps to counter self-destructive habits or set up processes to keep them from arising in the first place." Knowledge@Wharton has...
Following is a letter sent to the Editor of the Financial Times:Dear Sir, The UK regulators on this issue are exactly right in the way they are handling the Northern Rock situation, as are its depositors, who have lost confidence in the bank, that is, in the bank’s management ("Scramble to quit UK mortgage lender" September 14, 2007).Indeed, the Bank of England has been the only leading central bank that has not failed in the current turbulent times. The others have acted too soon, too much and continued to transmit the very lack of confidence that they have been trying to quell.If Northern Rock is basically solvent, the regulators are there to provide the emergency liquidity required, at a significant penalty cost, of course.The highly-paid senior managers at Northern Rock have shown...
Shares in one of the UK's largest mortgage lenders, Northern Rock, have fallen 32% after it had to ask the Bank of England for emergency funding.But experts and officials insist that Northern Rock, which has £113bn in assets, is not in danger of going bust.Despite the reassurances lines of customers formed outside many Northern Rock branches around the UK.The bank has struggled to raise money to finance its lending ever since money markets seized up over the summer.See full...
Compliance is no passing fad. It is a considerable concern for risk managers and something that can, if properly dealt with, actively improve internal standards, and enable organizations to reap a competitive advantage.So what are the main compliance concerns that risk managers are likely to face in the year ahead?When it comes to larger financial service organizations, Mark Opausky, CEO and Founder of Canada-based Business Propulsion Systems (BPS) – a leader in enterprise-wide, web-native business process execution solutions – believes 2006 will, in Canada at least, mean “reaching a demonstrable phase in credit risk calculation as part of Basel II. Meanwhile, companies will need to continue to develop a more comprehensive approach to the assessment and management of risk...
The collapse of Enron, WorldCom and other corporate accounting scandals of 2002 not only almost brought Wall Street to its knees; it also signaled the beginning of a new age of compliance.The collapse of Enron, WorldCom and other corporate accounting scandals of 2002 not only almost brought Wall Street to its knees; it also signaled the beginning of a new age of compliance. Companies have been forced to adopt better governance and risk management approaches, and in large part they have responded well.However, compliance is much more than a one-off challenge to be addressed with a point solution; it’s an ongoing concern that requires continuous monitoring and that impacts the business as a whole. And with a dazzling array of technologies and tools currently hitting the market in response...
Peter Drucker famously said that “most of what we call management consists of making it difficult for people to get their work done”. Drucker was the 20th-century’s pre-eminent management writer. The ambitious challenge Gary Hamel has set himself – and largely met – is to provide a new route map for 21st-century managers. How can organisations be more adaptable, innovative and resilient, and what do managers need to do, or stop doing, to help promote these qualities?It is worth mentioning Drucker because, while Hamel is full of admiration for the great names of management theory from the past – Frederick Taylor, Max Weber, W. Edwards Deming and Drucker himself – his point is that it is time to move on.Some of these greats, still hugely influential today, belong to “a small...
In this increasingly globalized world, we need to be more and more sensitive to other cultural and legal environments. Our clients will be grateful for our sensitivity.In this context, we provide a way to calculate the ages of our clients, in case they come from other worlds that are not our own. We need to keep up with those birthdays. It pays to be prepared!Here you can calculate ages on other worlds, just in case you begin to have clients are not only global, but also universal.Onésimo...
A Family Death Hurts, Studies Say, as Does Buying a MansionShould shareholders in a company care if the chief executive's child dies? What if the mother-in-law passes away?Such things don't normally figure in investment decisions. But maybe they should, according to a recent study by three finance professors. Mining a trove of Danish government data on thousands of businesses, they were able to track links between CEO-family deaths and the companies' profitability over a decade.It slid by about one-fifth, on average, in the two years after the death of a CEO's child, and by about 15% after the death of a spouse. As for an executive's mother-in-law, the old jokes seem to hold: The researchers found that profitability, on average, rose slightly after her demise.See full...
In recent years, the corporate self-help book has become a staple of the publishing industry. In the world of big business, books that claim to offer the secret to managerial success are themselves big business, routinely topping the bestseller lists and, in turn, anchoring the high-profile careers of executive coaches such as Gary Ranker, Kevin Cashman and Stephen Covey. Marshall Goldsmith is one of the most successful of corporate America's celebrity coaches -- he typically makes upwards of a quarter-million dollars for a year or so of work with each individual client -- and is also one of the best.The founder of executive coaching firm Marshall Goldsmith Partners LLC, Goldsmith has worked closely with more than 70 CEOs during his career. The chief executives of Ford Motor,...
A shift in thinking – employees are the new profit centersThe US Bureau of Labor Department forecasts in 2010 there could be ten million more jobs available than there are available employees to fill them in the US. So it is not surprising that Greg Ziols, Chair of Vistage, the world’s largest CEO membership organization, cites “recruiting and retaining employees in a tight labor market.” to be the most significant trend impacting business today. According to Ziols, Vistage’s 2007 “CEO Confidence Index” (www.vistage.com) found “Once again, finding and hiring qualified staff was cited as the most critical challenge for more than one third of all firms. Just one in ten CEO’s think it will become easier to find qualified employees.” See full...
One of my all-time favorite guilty pleasures is indulging in productivity porn.Productivity porn (or, for those really in the know, "productivity pr0n") consists of techniques, tactics, and tricks for maximizing personal productivity -- or, as they say, "getting things done".Having enjoyed such fine purveyors of prodporn as Merlin Mann, Danny O'Brien, Gina Trapani, David Allen, and Tim Ferriss, I'd like to return the favor with the following: the Pmarca Guide to Personal Productivity.The techniques that follow work together as an integrated set for me, but they probably won't for you. Maybe you'll get one or two ideas -- probably out of the ideas I stole from other people. If so, I have succeeded.And here we go:See full...
Judging from the enormous response I had last month from my blog entry on customer service, its clear the issues touches nerves. And reading through the responses, it seemed time to look at how businesses go about losing customers. What are the best ways to lose customers?Customer service consultant Paul Levesque identifies The Five Biggest Customer Service Blunders of All Time in the CEO Refresher online journal: putting too much focus on training, blaming poor service on demotivated employees, using customer feedback for witch hunts and scapegoating, using recovery stories for when things go wrong as the only means of recognising employees and competing on price.Not bad. But reading through your responses a few weeks back, the problems seem to go far deeper than that. So based on some...
PCMA Executive Edge - the Power of Authentic LeadershipMore and more human labor is being replaced with intelligent and cheap technology; a new era in energy is on the horizon...What does this all mean for our industry?Sophisticated computer programs, cutting-edge technologies and the new energy economy will affect virtually every sector and industry. Fresh alternatives to formal work must be devised-or we risk a future filled with mass unemployment and permanently displaced workers. Consider how the advent of the Internet has changed (and continues to change) the way you conduct business every single day-more changes lie ahead. Position your organization to be prepared for the "future of work."Join renowned Economic Futurist Jeremy Rifkin to: * Uncover the bold changes ahead in the...
Will environmental issues force supply chain managers to think the unthinkable? That topic was debated at a recent conference hosted by consulting firm SCALA Logistics Consulting. For instance, John Perry, SCALA's managing director, suggests companies need to ask themselves these key questions: * Would you put the environment before cost benefits? * Would you collaborate with competitors? * Would you reduce customer demand for the benefit of the environment? Chris Robinson, international supply chain manager with UK-based food manufacturer Tetley Tea, says, "We should not be ashamed of saying that we are looking to make a profit. But we must act in a responsible way."One of those ways, he suggests, is to collaborate more closely with supply chain partners. "In the UK today the...