| If you are having difficulty seeing this mail or images in it, you can view it in your Web browser. |
|
| Volume 6, Issue 5 |
|
In This Issue:
 Philanthropy with a business bent
Giving at the office without going broke
Most common resume lies
The other energy crises
 Creating strategy in an unknowable universe
The morning meeting ritual
Make the most of your off-site
Peter Drucker on Managerial courage
Why technology negotiations are different
 How I make decisions
Why dream teams fail
How to build a great team
RAZR’S edge
 Wired for winning loyalty
 Feeling the heat
 Continuous auditing not yet automatic
Job picture bright for Finance, Accounting
Sarbox burdens prompt CFO job churn
Job satisfaction higher in Finance
 Warming up to performance dashboards
 Are you marathon material?
|
|
|
 |
Philanthropy With A Business Bent
Warren Buffett's $35B giveaway
In an exclusive interview, the Berkshire Hathaway CEO
speaks with FORTUNE's Carol Loomis about why he shifted
gears, his relationship with Bill Gates and what it feels
like to give away so much.
|
|
|
Under the dome of the Celeste Bartos Forum in the New York Public Library
Monday, Warren Buffett signed five commitment letters, one each to the foundations
run by his three children, one to the foundation in his late wife's name and
one--the big $31 billion one--to the foundation run by his bridge partner and
friend of 15 years, Bill Gates, and his wife, Melinda.
At each stroke of his pen, each of the five doubled the size of its endowment as
the world's second richest man started the process of turning over 85% of his
$44 billion fortune. Even in inflation-adjusted dollars, Buffett will be giving
away more money than John D. Rockefeller or Andrew Carnegie. For what must count
as one of the most momentous days in philanthropy, it was a remarkably low-key
affair. But that's the Cherry Coke Buffett way. "How often do you give away a
billion dollars with a letter starting 'Dear Suse'," he joked to a roomful
of foundation pros about the commitment to the foundation run by his daughter
Susan. But the main event, his Gates Foundation donation, marked a serious coming
of age of entrepreneurial philanthropy...
Read the article. Back to top
Giving At The Office Without Going Broke
We've all been there. One month, there are three birthdays in your department.
Then in the summer, your heart and purse strings get tugged by co-workers looking
to be sponsored for this or that charity walk. Come fall, it's Girl Scout cookie
time. And let's not forget the retirements and that guy a couple of cubicles over
whose wife is pregnant...again.
You smile, but you want to scream, "Leave me alone! Do you know how much I get
paid?" It's a classic office-etiquette dilemma: To chip in or not to chip in.
On the one hand, you don't want to seem like a grouch or a Grinch. On the other
hand, you really don't want giving at the office to make you go broke. "What I
find from companies I work with is employees are becoming very frustrated,"
says Jacqueline Whitmore, author of Business Class: Etiquette Essentials for Success
at Work. [Between companies that make employee recognition a priority and those
that don't, "we thought maybe there would be a 10% difference in profitability,"
says Adrian Gostick, O.C. Tanner's marketing director and author of The
Invisible Employee. Instead, the survey indicated that companies with
employee recognition programs have three times the return on equity. "It was
quite startling," Gostick says.]...
Read the article. Back to top
Most Common Resume Lies
From foolish fibs to full-on fraud, lying on your résumé is one of the most common ways that people stretch the truth.
But think twice before you ship off your next half-baked job application. Even
if your moral compass doesn't keep you from deceit, the fact that human resources
is on to the game should.The percentage of people who lie to potential employers
is substantial, says Sunny Bates, CEO of New York-based executive recruitment
firm Sunny Bates Associates. She estimates that 40% of all résumés aren't
altogether aboveboard. And this game of employment Russian roulette is getting
riskier and riskier. Almost 40% of human resources professionals surveyed last year
by the Society for Human Resource Management reported they've increased the amount
of time they spend checking references over the past three years...
Read the article. Back to top
The Other Energy Crisis
Read the front page of any newspaper or tune in to any newscast, and you’ll
find near daily coverage of the global energy crisis and soaring fuel prices. But
I’m convinced that the real energy crisis is not taking place in the oil fields
of Texas and Iraq or the gas stations of New York and California, but rather inside
the people and the companies that contribute to our global economy.
In a 2004 survey conducted by Harris Interactive, less than 15% of Americans agree
that they feel strongly energized by their work and only 20% feel very passionate
about their jobs. The cost to corporate America of fatigue, burnout and a lack
of engagement is staggering. The Gallup Organization estimates that cost to be
$250 billion to $300 billion, while workplace fatigue alone costs U.S. businesses
at least $77 billion per year, according to the National Sleep Foundation.
Today’s employees are under-engaged, overtired and overstressed. Not convinced?
Try eavesdropping on watercooler conversations. You won’t hear anything, because...
Read the article. Back to top
|
|
|
|
 |
Creating Strategy in an Unknowable Universe
| In his book The Origin of Wealth, Eric D. Beinhocker
argues that a radical new view sees economics as a
highly dynamic and evolving system with implications
for companies and organizations everywhere. An excerpt. | |
|
“We should think of strategy as a portfolio of experiments.”
“This shift in perspective implies a major redesign of the strategic planning process.”
|
Editor's note: In his new book The Origin of Wealth, McKinsey & Company
Senior Advisor Eric D. Beinhocker argues that the traditional view of economics
as a static, equilibrium-balanced system is going through a radical rethinking
involving a multitude of disciplines. The new spin: "complexity economics," in
which the economy is viewed as a highly dynamic and constantly evolving system
that is all but impossible to predict. This excerpt deals with how companies can
set strategy when the future is unknowable.
Strategy as a portfolio of experiments
The key to doing better is to "bring evolution inside" and get the wheels
of differentiation, selection, and amplification spinning within a company's four
walls. Rather than thinking of strategy as a single plan built on predictions of
the future, we should think of strategy as a portfolio of experiments, a population
of competing Business Plans that evolves over time. We will look at the elements
of such an approach shortly, but first, an example will help illustrate what a
portfolio of strategic experiments looks like. Let's return to the Microsoft story
and imagine it is now the year 1987, six years after Gates signed the contract with
IBM. The still nascent PC industry has just gone through a period of explosive growth.
No one has ridden that growth harder than Microsoft. But MS-DOS is now coming to the
end of its natural life cycle. Customers are beginning to look for a
replacement operating system that will take better advantage of the graphics and
greater power of the new generation of machines. A change in the S-curve is coming,
and the industry is far from certain how things will work out. Despite its
success, Microsoft was still a $346 million minnow in 1987 compared to
the multibillion-dollar giants hungrily eyeing its lucrative position. IBM
was developing its own powerful multitasking OS/2 system; AT&T was leading a
consortium of other companies, including Sun Microsystems and Xerox, to create
a user-friendly version of the widely admired Unix operating system; and
Hewlett-Packard and Digital Equipment Corporation were pushing their own version
of Unix. Apple was also still a threat, consistently out-innovating the rest of
the industry, and its highly graphical Macintosh was selling well. We can imagine
the options that Microsoft faced at this point. Option one: Gates could...
Read the article. Back to top
The Morning Meeting Ritual
| Is your organization plagued by inefficient
communications, finger pointing, and lack of
accountability? Get all key decision makers to
the table—same time, every day. Welcome to Marty
Linsky's The Morning Meeting. From Harvard Management Communication Letter. | |
|
|
“Issues cannot be covered over, and people can no longer hide.”
|
A global petrochemical company struggling to create a coherent strategy after
a merger with a very different kind of firm. A small advertising and design house
trying to manage itself during a time of rapid growth. A public agency facing a
series of budget cuts that threaten core services and deeply held values. An
established bank losing market share to new boutique players coming into its market
and cherry-picking high-margin products.
As diverse as the challenges facing these organizations seemed, when my colleagues
and I looked closely, we recognized that they shared two closely linked
underlying causes: chronic communication problems within the executive team and a
lack of shared accountability. When communication is stifled and turf protection
the order of the day, an organization's senior leadership team is less than the sum
of its parts and cannot grapple with strategic and operational challenges
most effectively. Expertise and energy go untapped: less than frank
communication sometimes means that team members do not know the full extent of
one another's issue; and a lack of shared accountability leads some to think,
"Hey, that's his problem and he's got to fix it." In contrast, two
qualities characterize high-functioning leadership teams:...
Read the article. Back to top
Make the Most of Your Off-Site
| The key: advance preparation. This means restricting in
advance the scope and number of issues to a manageable
few. And don't invite too many people. An excerpt
from Harvard Business Review. | |
|
“The meeting is not the place to
plod through data.”
“If most companies have
too many participants, they have too few off-site sessions.”
|
A strategic off-site's success is largely determined by what happens before it convenes.
To make sure the meeting generates tangible results, its designer must do three
things. First, answer the most basic questions:...
Read the article. Back to top
Peter Drucker on Managerial Courage
| Each product, operation, and activity should be justified every two or three years, wrote Peter F. Drucker in 1963. But that's a hard step for managers to take. A Harvard Business Review classic. | |
|
|
Unfortunately I know of no procedure or checklist for managerial courage.
|
I do not propose to give here a full-blown "science of management economics," if only because I have none to give.
Even less do I intend to present a magic formula, a "checklist" or "procedure"
which will do the job for the manager. For his job is work—very hard,
demanding, risk-taking work. And while there is plenty of laborsaving machinery
around, no one has yet invented a "work-saving" machine, let alone a "think-saving"
one. But I do claim that we know how to organize the job of managing for
economic effectiveness and how to do it with both direction and results. The
answers to the [following] three key questions . . . are known, and have been
known for such a long time that they should not surprise anyone.
1. What is the manager's job? It is to direct the resources and efforts
of the business toward opportunities for economically significant results. This
sounds trite—and it is. But every analysis of actual allocation of resources and
efforts in business that I have ever seen or made showed clearly that the bulk of
time, work, attention, and money first goes to "problems" rather than to
opportunities, and, secondly, to areas where even extraordinarily successful
performance will have minimum impact on results.
2. What is the major problem?...
Read the article. Back to top
Why Technology Negotiations Are Different
| Technology negotiations are complex and many managers are left with a sense of unease. Am I getting the best deal? Will the ERP system I buy today be obsolete tomorrow? Lawrence Susskind offers keys to help you avoid the pitfalls. From Negotiation. | |
|
Executives are increasingly faced with the task of negotiating in a realm that many know little about: technology.
Whether you're bargaining over the purchase of a new companywide network, coping
with a possible infringement of patented technology, or seeking better customer
service from a software supplier, technology negotiations have become a fact
of managerial life. How do such negotiations differ from those that are
less technologically complex? You can anticipate four specific problems to crop
up more often in the technology arena:...
Read the article. Back to top
|
|
|
|
|
How I make decisions
FORTUNE asked eight bold, creative people - from the next chairman of the Joint Chiefs, to the man who found Harry Potter, to the woman who picks next year's hip colors - to describe what guides their decision-making. Here is what they said...
Read the article. Back to top
Why dream teams fail
It may be tempting to recruit all-stars and let 'em rip. Don't do it. Dream
teams often become nightmares of dysfunction.
In what universe is it even conceivable that the United States could fail to
reach the semifinals of something called the World Baseball Classic? Not only
fail to win, but could field a team that included Roger Clemens, Derek Jeter,
Alex Rodriguez, and Johnny Damon and then lose games to Mexico, South Korea,
and - wait for it - Canada? Yet it happened this year. How could a movie starring
Brad Pitt, George Clooney, Catherine Zeta-Jones, and Julia Roberts, directed by
Steven Soderbergh, get tepid reviews and gross less worldwide than the star-free
My Big Fat Greek Wedding? That movie was Ocean's Twelve. And how could a
FORTUNE 500 company run by a brilliant former McKinsey consultant, paying fat
salaries to graduates of America's elite business schools, dissolve into fraud
and bankruptcy? It happened at Enron...
If someone tells you you're being recruited onto a dream team, maybe you should run.
In our team-obsessed age, the concept of the dream team has become irresistible.
But it's brutally clear that they often blow up. Why?...
Read the article. Back to top
How to build a great team
Harmony. Cooperation. Synchronized effort. It's difficult, but it can be
learned. Watch the great teams very closely - and then join one of your own.
FORTUNE Magazine) - In 1972, a crack commando unit was sent to prison by a
military court for a crime they didn't commit. These four men promptly escaped
from a maximum-security stockade to the Los Angeles underground. Today, still
wanted by the government, they survive as soldiers of fortune. If you have a
problem, if no one else can help, and if you can find them, maybe you can hire
the A-Team. The A-Team went off the air in 1987 - still wanted by the
government - but television has never produced a better blueprint for team
building. The key elements of its effectiveness: a cigar-chomping master of
disguise, an ace pilot, a devilishly handsome con man, a mechanic with a mohawk
and an amazingly sweet van. Those particulars might not translate to all
business settings. But clear definition of roles is a hallmark of
effective collaboration. So is small team size - though four is slightly below
the optimal number [of]...
Read the article. Back to top
RAZR'S edge
 |
How a team of engineers and designers defied Motorola's own rules to create
the cellphone that revived their company.
Hundreds of Motorolans jammed into a company auditorium in Schaumburg, Ill.,
last December to mourn the sudden death of their storyteller-in-chief.
It was a bittersweet moment for Motorola. Geoffrey Frost, the
56-year-old marketing genius responsible for the company's snappy "Hello Moto"
ad campaign, had died in his sleep of a heart attack two weeks earlier. Thanks
in no small part to Frost's dramatic flair, the proud but humbled company was
on the upswing for the first time in years. CEO Ed Zander, who eulogized Frost
that day, had promoted him to executive vice president only hours before he
died. Frost, you see, had become a symbol of Motorola's resurgence as an
unexpectedly stylish technology powerhouse.For a few engineers and industrial
designers attending the memorial service, though, Frost represented something more.
The celebration of his life drew attention to their greatest accomplishment,
the creation just two years earlier of the ultrathin, superhip RAZR V3, the
hottest Motorola phone in nearly a decade. Frost had been the phone's cheerleader;
he'd come up with its catchy four-letter name. He also had spun an appealing
narrative about how Motorola was cool again, and a myth about the slick
downtown Chicago design studio where the phone had taken shape.
The story behind the RAZR's creation. What the unsung team of heroes knew,
however, was that the actual story of how the RAZR came to be is even more
compelling than, if not quite as glamorous as, the version Frost had peddled...
Read the article. Back to top
|
|
|
|
 |
Wired for Winning Loyalty
Do you hear the "call of the wired"? You should. In the US alone, a whopping
70% of the population (adults 18+) now uses the Internet.
What's more, reports the Pew Internet Project, on a typical day 38% of wired
adults use a search engine and 30% go online just for fun or to pass the time.
Bottom line: The wired world is brimming with purchase potential and it's high
time to answer the call. Are you...
- Harnessing wired (and wireless) innovations to woo prospective buyers?
- Tapping into the ever-evolving treasure chest of wired capabilities to transform one-time purchasers into staunch advocates?
Consider the following five firms and how each is using wired solutions to address
the multi-stage challenges of growing loyal customers...
Read the article. Back to top
|
|
|
|
|
Feeling the heat
|
America's Federal Reserve gets a touch of the vapours.
Central bankers are supposed to be calm, even a little boring. But the governors
of America's Federal Reserve seem to have been seized by a sudden panic about
inflation. Virtually every Fed official has been worrying aloud about rising prices.
Ben Bernanke, the Fed's chairman, warned about “unwelcome” inflation on June 5th.
Since then his colleagues have declared it to be “troubling”, beyond their
“comfort level” and even “corrosive”. This hawkish talk has not been lost on
financial markets, which now take for granted that the federal funds rate will
be pushed up by a quarter of a percentage point, to 5.25%, at the end of the
central bankers' next meeting on June 28th and 29th. Judging by the price of
futures contracts, markets see a better than even chance of another quarter-point
rise in August. Several forecasters believe that short-term rates will reach 6%
by early 2007. Less than two months ago, Wall Street was worried that Mr Bernanke's
Fed would be too soft on inflation. Now the opposite fear has taken hold. A
rising chorus wails that Fed officials have become obsessed with monthly
inflation figures and that their fixation will cause them to push interest rates
too high and tip the economy into recession. David Rosenberg, chief economist at
Merrill Lynch, puts the odds of a recession in 2007 above 40%. The idea that the
Fed worries too much about inflation comes from several quarters....
Read the article. Back to top
|
|
|
|
 |
Continuous Auditing Not Yet Automatic
About half of the companies that practice it also incorporate some
automated elements, according to a new survey, though only a few companies have
shed their manual processes entirely.
Half of U.S. companies now use "continuous auditing" techniques, according to a
new survey by PricewaterhouseCoopers, and 31 percent of the rest have already made
plans to do likewise. "This may be the beginning of a significant change in the
way internal auditing has traditionally been done," said PwC partner Dick Anderson,
in a press release. A total of 392 companies responded to the survey...
Read the article. Back to top
Job Picture Bright for Finance, Accounting
Chief financial officers are apparently in a hiring mood.
According to the latest quarterly survey from Robert Half International, 7 percent
of CFOs expect to bring on full-time accounting or finance employees in the
third quarter, while 3 percent anticipate reductions in personnel. The staffing
firm noted that for the second quarter, the spread between hiring and cutbacks was
just a single percentage point. The national poll includes responses from more
than 1,400 CFOs from U.S. companies with 20 or more employees...
Read the article. Back to top
Sarbox Burdens Prompt CFO Job Churn
Will Sarbanes-Oxley turn CFOs back into bean counters? Finance chiefs have had
little time for strategy in the four years since the law was passed, according to
a study by a prominent headhunting firm.
Here's one more thing to blame on the Sarbanes-Oxley Act: an increase in job churn
for CFOs of Fortune 500 companies. A study released this month by Russell
Reynolds Associates found that 19 percent of large-company finance chiefs left
their posts in 2005, up from 16 percent the previous year and 13 percent in 2003.
While resignations helped boost the total, promotions did not...
Read the article. Back to top
Job Satisfaction Higher in Finance
Accounting and finance employees are more likely than the overall workforce to
have received a raise within the last year and more likely to receive
quarterly performance reviews.
Finance executives seem more satisfied with their jobs than most other
workers, according to a new survey by human-capital consultancy Hudson. Some
34 percent of accounting and finance workers reported being very satisfied with
their compensation, compared with just 28 percent of all survey respondents. And
78 percent are very or somewhat satisfied with their jobs, compared with 72
percent for the survey population as a whole...
Read the article. Back to top
|
|
|
|
 |
Warming Up to Performance Dashboards
 |
Dashboards that monitor organizational performance can spark a great awakening
within the businesses that use them. Instead of waiting a month or two to see
how actuals compare with plans, dashboard users are alerted to a performance
shortfall almost as soon as it occurs, so they have the chance to head it off early.
That fosters a more proactive approach to managing the business, empowers workers to
act confidently and helps them do their job better. Yet despite the undeniable
benefits of dashboards, this type of tool isn't always embraced by everybody in
a company. In fact, it may serve as an unhappy awakening for some constituents.
Receiving performance information virtually instantaneously changes how workers
work and how managers manage, which is bound to ruffle a few feathers.
Performance dashboards increase individual accountability and responsibility.
Suddenly, everyone may be able to see how everyone else is doing from one day
to the next. While some corporate cultures are comfortable making dramatic changes
in the way their employees are judged, many don't take such changes easily in
stride. Convincing people within these resistant environments to warm up to
dashboard technology can be an uphill battle. "It's hard to get people to use
the dashboards -- even though they're flashy performance tools -- in part because
people have become comfortable with the reams of performance reports that they see
every month," says Craig Schiff, president of BPM Partners in Stamford, Conn.
"In addition, people tend to think that dashboards make the company look too
summarized, too encapsulated, to be of any significant value."...
Read the article. Back to top
|
|
|
|
|
Are you marathon material?
|
| Runners start the New York City Marathon last November. The running of the 36th
annual road race featured one of the most competitive fields ever,
including 35,000 participants from 99 countries and all 50 U.S. states.
|
Endurance events are trendy, but crossing the finish line is still tough.
Jacob Havenar ran his first marathon in 2000 with some soccer buddies who were
looking for a new challenge. His motivation to keep up with the guys — and earn
bragging rights — helped him make it to the finish line. But his main drive came
from deeper within. "It's nice to be able to say you've done a marathon," he says.
"But for me, the part that meant the most was the sense of personal accomplishment.
It changed my life. It made me feel like I could do anything in the world."
Like Havenar, more and more first-time marathoners are getting in the race.
Statistics from USA Track and Field show that more than 400,000 runners now compete
in an estimated 400 U.S. marathons each year, up from about 236,000 participants
in 1990.
Marathon running is increasingly popular for several reasons, Havenar and others
say. Some people are inspired by success stories common in the media and want to
achieve such a big personal goal. Some are hoping to improve their health or
lose weight. Others want to do a good deed; more participants are now competing to
raise money for their favorite charity. And why they decide to participate may make
a big difference in whether they'll succeed, according to new research by Havenar,
now a doctoral candidate in physical activity, nutrition and wellness at Arizona
State University. Going the distance isn't for everyone...
Read the article. Back to top
|
|
|
Forward to a Friend:
Do you have a friend that would like to receive FinanceWatchsm?
Perhaps you know a peer within your organization, or associate at a partner company that would
benefit from applying to receive this publication. Inviting a friend to experience the benefits
of joining the BusinessWatch Network is easy! Just FW: this newsletter to the person you know who
may have an interest and ask them to click here http://www.businesswatchnetwork.com Your friend will be glad you did!
|
|
|
If at any time you would like to unsubscribe from FinanceWatchsm
simply change your status,
or send a letter requesting opt-off to:
The BusinessWatch Network Privacy Mailbox, 1321, Marblehead, MA. 01945
DISCLAIMER: FinanceWatchsm and the BusinessWatch Networksm are service marks of DMS.
All other trademarks or service marks contained in this email are the property of their respective owners.
At the time of publication, all links in this e-mail functioned properly. However, since many links point
to sites other than businesswatchnetwork.com, some links may become invalid as time passes.
DMS Inc. supports the DMA Privacy Promise and
Guidelines for Ethical Business Practice. We are committed to the proper use of
email and to protecting consumers from fraudulent or inappropriate
offers. Privacy Policy
|
|
|
| |
