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| Volume 9, Issue 6 |
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In This Issue:
 The tricky truth about downsizing
 Lean in a downturn: Six actions to take now
 How to fix cash-flow problems
 Reaching deeper for [IT] savings
Those lucrative [liquid] intangibles
The [state] tax men cometh
Last tax [shelter] standing
 How to revise an email so that people will read it
The art of the self-imposed deadline
Three big assumptions leaders should question
Stay home and work
Susan Boyle: A lesson in talent management
 Smart presentations: Trash the title slide
 How Facebook mucks up office life
 Raising Bill Gates
 Foods you should be eating, but aren't
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The tricky truth about downsizing
Axing workers doesn't necessarily make a business lean and mean, says Harvard's Freek Vermeulen.
Downsizing has always been a popular practice in the corporate world—even for firms not in distress. But today, with many companies in distress, downsizing efforts are on the rise. So I thought I might as well look into what we know about the effects of such efforts from academic research to see when they can be a good idea. The
answer? Not very often. On average, they simply don't work. For example, professors James Guthrie, from the University of Kansas, and Deepak Datta, from the University of Texas at Arlington, examined data on 122 firms that had engaged in downsizing and statistically analyzed whether the program had improved their profitability. And the
answer was a plain and simple "no." The average company did not benefit from a downsizing effort, no matter what situation and industry they were in. So why do they usually not work?...
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Lean in a downturn: Six actions to take now
With their focus on eliminating waste and doing more with less, lean programs are gaining renewed attention as the global downturn deepens.
But because of the challenges involved, many initiatives haven’t lived up to their promise—often because the initial rigor fades over time and counterproductive behaviors emerge. The current financial crisis presents an opportunity for companies
to revisit their lean programs and correct the bad habits that are consuming cash and hurting profitability...
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How to fix cash-flow problems
Cash-flow problems have just a few possible causes. More often than you might think, business is all about the basics.
I'm often amused by the reactions of people who come to me for help. I usually start by interviewing them in my office. They explain the problem they're having. I ask them a few questions. They answer as best they can. I then tell them something about their business that they can't believe I could know. They think I'm a genius. If only it were true. In fact, I'm just applying the basic business knowledge that allows you to analyze what's going on in a company. Once you have that knowledge, you can do the analysis on your own. [Now, cash-flow problems are common in business, and people often have a hard time figuring out what's behind them, but there are actually just a few potential causes...]
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Reaching deeper for [IT] savings
You may be able to squeeze more out of your IT budget than you realize.
You've outsourced, you've consolidated data centers, you've decided that the usual three-year PC refresh cycle can be stretched to four years. All well and good, but what else can you do? "Given the current economic climate, you have to be willing to think a little bit differently about things," says Joanne Kossuth, vice president
for operations and chief information officer at the Franklin W. Olin College of Engineering in Needham, Massachusetts. Although IT departments continue to apply proven cost-cutting approaches, here are seven relatively new and innovative
techniques that CIOs such as Kossuth are using to shrink their tech-related spending...
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Those lucrative [liquid] intangibles
As the volume of intellectual property soars, so do efforts to maximize IP's profit potential.
In hard times, finance chiefs extract value from every asset in sight. But what about the assets they can't see, like copyrights, patents, and trade secrets? Intellectual property (IP) may be intangible, but it can fetch substantial sums. As knowledge-based firms have flourished, the value of IP in the United States has
swelled — to as much as $5.5 trillion, according to a 2005 study sponsored by nonprofit USA for Innovation. A growing industry has sprouted to serve companies seeking to shake loose extra cash from IP. "There's a new landscape out there for
companies that need to figure out what their IP is worth and how to sell it," says Edward Black, partner at law firm Ropes & Gray...
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The [state] tax men cometh
Beset by plunging revenues, states step up their pursuit of corporate taxes.
A small furniture manufacturer based in Arizona recently received a nexus survey — a questionnaire about the company's business activity — from the state of Washington. With just two retail customers in the Evergreen State and a lone sales rep making an annual visit there, the Arizona company returned the form and thought that was the
end of the matter. No such luck. Washington assessed the Arizona furniture manufacturer "a substantial income tax," according to Marvin Kirsner, a tax attorney with Greenberg Traurig who represents the company. "One salesperson was there for a total of three days over four years. That was all it took." State budgets, which
seem to flirt with disaster even in good times, are now in dire straits, and that has big implications for business...
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Last tax [shelter] standing
With other breaks coming under pressure, companies are showing renewed interest in a lucrative but little-used tax structure that involves setting up a shell company to which it can funnel export revenues.
President Obama's proposed limit on the tax benefits associated with income generated overseas is likely bad news for most multinational businesses. But there may be some consolation for companies selling U.S-made goods overseas. Experts say they're seeing renewed interest in a lucrative but little-used export tax break
known as the IC-DISC (interest charge - domestic international sales corporation). Although the provision fluctuates in popularity depending on the presence of other tax incentives, it's been part of the tax code for 37 years. The structure, which experts say can pay for itself in months, is a way for closely-held companies to cut
taxes and for many others to defer taxes on a cash stash. "It's the only export tax incentive we still have," says Jonathan Lysenko, international tax director for Amper, Politziner & Mattia, an accounting firm. "What's really disappointing is that so few exporters take advantage of it." To be sure, there are reasons for caution...
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How to revise an email so that people will read it
"People think that the first draft is the big event and that revision is cleaning up afterward. But the first draft is really setting up the chairs, tables, and cups, and revision isn't cleaning up after the party, it is the party."
"All first drafts are terrible. I don't care if you're Hemingway." "What comes out unfiltered from anyone's mind is mud." The first two quotations come from writing professors whose names I've since forgotten (and they were quoting other people whom they'd forgotten). The last one is one I just made up myself. But regardless of the
source, the advice is sound: no email should be clicked-to-send without revision. I've found that for your average email, the number of revisions largely depends on the number of recipients. Here's my experience:...
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The art of the self-imposed deadline
For people who work for themselves, the self-imposed deadline is a fact of life.
Whether you're starting a business, writing a dissertation, or consulting for a dozen clients, paying attention only to your drop-dead dates would mean never meeting them. You obviously have to set up interim goals along the way. But the art of self-scheduling is not unique to entrepreneurs and PhD students. It's one that I
actively -- and successfully -- practiced for the two decades I spent working for other people. And it's now making my transition to freelance life a lot smoother. Here are the self-scheduling techniques that worked for me really well in the office
-- and that remain the hallmarks of my working style out on the professional fringes:...
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Three big assumptions leaders should question
Corporate success rests on good leadership.
Or so we all believed. For at least a generation, we have praised corporate executives as examples of good management. To me, one of the most disturbing aspects of the current recession — aside from financial insecurity — is the failure of leadership, especially corporate leadership. So the question arises, what were
senior executives thinking? How did they allow this to happen? And why were they so late to respond? In May 2008, just as the recession was gaining steam, management strategist Gary Hamel convened a group of business leaders and scholars together to consider the future of management. [And so I believe it is appropriate for those of
us who teach and write about leadership to question our own assumptions, too. Here are three assumptions about how leaders manage that are coming under challenge...]
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Stay home and work
President Obama, here is a deceptively simple action item to put on your agenda for business growth, working families, and a green future: Make it the norm for everyone to work at home at least one day a week.
That single step could raise productivity, save energy, decrease pollution, reduce traffic congestion, cut household expenses, increase quality of family life, and keep educated women in the work force. Workers of the world, go remote! During this
time of economic crisis and reinvention of global capitalism, one of the things crying out for reinvention is the rigid workplace of the last century...
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Susan Boyle: A lesson in talent management
Susan Boyle, who recently performed on the UK television show Britain's Got Talent, has captured the world's attention. And it's a good lesson for managers the world over.
In case you've missed it: she's a 47-year-old unemployed charity worker who lives with her cat in a small village in Scotland. As soon as she walked on stage the audience began to snicker and roll their eyes. Simon Cowell, the show's host, asked her some pre-performance questions in his famously condescending style and, to the
audience's enjoyment, she answered awkwardly. She was painfully ordinary and everyone was prepared, looking forward even, to see her fail. By now, if you don't know the story, you could guess it, right? She more than wowed them. She opened her mouth to sing and, as one of the three judges Pierce Morgan later said, she had "the
voice of an angel." She wasn't painfully ordinary; she was extraordinary. [But there's something else Susan Boyle awakens in us as we watch her come out of her shell. Our own selves. Who among us doesn't move through life with the hidden sense, maybe even quiet desperation, that we are destined for more?...]
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Smart presentations: Trash the title slide
If you were in the audience, which would you rather experience: a boring recitation or a compelling conversation?
No contest, right? So why do so many people lean toward "boring recitation" in their presentations? Habit? Fear of screwing up (and thus the crutch of text-heavy slides)? Maybe they don't know better? Or they do know better, but have to give an "approved" (and deadly) presentation. No matter the reason, there's no reason why
you have to be part of that group. You know when the tone is set for a presentation? With the very first slide—even before you open your mouth, if that slide happens to be displayed before you begin. Imagine that: You're on the way to engaging your
audience or turning them off before you say a single word. Sorry to be the voice of doom, but that's really the way it is. Why? ...
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How Facebook mucks up office life
Managing a workforce is already a challenging job; now Facebook and other social networks raise a host of sticky new situations.
Imagine walking into a meeting and encountering not just your current co-workers, but all your colleagues and managers from jobs past, along with your spouse, your college drinking buddies, your Senior Prom date, and, off in a corner, your adolescent son, busy telling your boss how many hours he logs in every day playing
Grand Theft Auto. It's not a nightmare, it's Facebook. If you're anything like the 200 million users on the burgeoning social network, you probably didn't give enough thought when you first signed on to which friend requests you accepted, or whom you invited via the Friend Finder. Now you've got a dangerously random group of friends
and friends-of-friends sharing -- and over-sharing -- information, sometimes without your even being aware of it. The "he told two friends, and they told two friends" syndrome can be embarrassing in your personal life, but potentially much more serious in the world of work. [In short, the more ubiquitous Facebook becomes, the
greater its potential to muck up office life -- and make your job as a manager just that much more treacherous. And these are just the accidents. The sea of information on Facebook is also starting to attract information pirates, identify thieves and malware distributors. The best defense against these threats is...
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Raising Bill Gates
Spend time with the family of Bill Gates, and eventually someone will mention the water incident.
The future software mogul was a headstrong 12-year-old and was having a particularly nasty argument with his mother at the dinner table. Fed up, his father threw a glass of cold water in the boy's face. "Thanks for the shower," the young Mr. Gates snapped. The incident lives in Gates family lore not just for its drama but also
because it was a rare time that Bill Gates Sr., father of his famous namesake, lost his cool. The argument presaged a turning point in the life of a tempestuous boy that would set him on course to become the Bill Gates whom the public knows as co-founder of Microsoft Corp. and the world's richest man. Behind the Bill Gates
success story is the other William Gates. The senior Mr. Gates balanced a family thrown off kilter by a boy who appeared to gain the intellect of an adult almost overnight. He served as...
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Foods you should be eating, but aren't
Improving your health can be as simple as eating these items.
Eaten many coconuts lately? How about cherries or blueberries or grass-fed beef? You should, because these are all foods with powerful health properties. However, few people pack their grocery carts full of these items. Take kiwifruit. It's chock full of...
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