Perception 1, Reality 2


“Business confidence is falling but at a less alarming rate than previously, according to the latest global business barometer, a quarterly survey of more than 1,000 executives conducted for The Economist by the Economist Intelligence Unit, its sister company. The overall confidence index, which measures the balance of bosses who think business will pick up over those who expect it to worsen, was still fairly negative. Yet most industries saw only a small decline in confidence, and the mood of executives in entertainment, media and publishing, and in health care has lifted a little. North and Latin America were the only regions to see an overall improvement in executive mood in the past three months.”

(“Global business barometer.” The Economist: July 26, 2008. pg. 53)


UNDERSTANDING that perception is reality, then what is the reality of our perceptions?

(check out tomorrow's posting for more... )

Hire, then Higher than Higher Ed


“Indian industry isn't relying on India's education system to gain an edge. Indian industry has developed a surrogate education system that can take workers with weak educational backgrounds and turn them into world-class R&D specialists…

“India graduates around 200,000 engineers a year, but the quality of the students varies widely. India's main tech trade group, NASSCOM, says that only half of these new graduates are employable…

“Yet… India is rapidly becoming a global R&D hub in several industries. Its scientists are doing sophisticated drug discovery for Big Pharma. Its engineers are designing key components of jetliners for Boeing and Airbus, [and] developing next-generation networking equipment for companies like Cisco Systems…

“In all of the companies we studied, we found that the intense focus by senior corporate executives on implementing companywide staff-development initiatives caused dramatic improvements in productivity and performance.

“Workforce development helps to explain, for example, how IT service firms have been able to increase billing rates and productivity levels and maintain high levels of growth and profitability despite skilled-talent shortages, rising salaries, falling exchange rates, and other challenges. Employee development similarly explains how companies in India are able to hire bright but largely inexperienced talent to successfully engage in R&D and other innovation.

“The achievements of companies in India show that employee investment, development, and empowerment are central and critical means to building and sustaining long-term competitiveness and innovative capacities in a global knowledge economy. The U.S. can learn and incorporate these lessons from India as it rethinks how to train and develop its workforce to maintain its global competitive edge. U.S. companies have long played the guru. Perhaps the time has come for the guru to learn from a disciple.”

(“What the U.S. Can Learn from Indian R&D; Engineering companies in India play a leading role in educating their research employees, a practice the U.S. can adopt to help keep its global competitive edge.” Vivek Wadhwa. BusinessWeek.com: July 24, 2008)


IF PEOPLE ARE INDEED potentially your greatest asset and your greatest potential liability, then what is your best investment?

Private enterprise has always out-educated educational institutions. So let's not lose our grip on the future by loosening our grasp on where the future really lies.

Retrospective Sensemaking


“Microsoft Corp. Chief Executive Steve Ballmer tried to put a good face on the software maker's failed attempt to buy Yahoo Inc. and pressed the case for Microsoft's continued investment in online services -- particularly Internet search…

“Mr. Ballmer's comments came at Microsoft's annual meeting with analysts at its headquarters in Redmond, Wash. He and other executives devoted much of the meeting to addressing investor concerns about Microsoft's Internet business. Central to his strategy, Mr. Ballmer said, will be boosting spending on online-related technologies and marketing, and on buying other companies.

“‘We're going to have to ante up in a significant way to even be in this game,’ Mr. Ballmer said.

“Microsoft spent most of this year trying to strike a deal with Yahoo -- first trying to buy the whole company and then trying to buy its Internet-search business -- but that quest ended when Yahoo rejected Microsoft's offers...

“Mr. Ballmer Thursday said that Microsoft didn't want to buy Yahoo ‘at the wrong price’ and noted that the inability to reach an agreement in the spring made it impossible to start a regulatory review of any deal before a new U.S. president took office. He also said that buying Yahoo would have created ‘huge integration overhead’ to merge the two companies.

“Without Yahoo, he said, Microsoft will have more flexibility to try to attack Google Inc. with new technologies and acquisitions in Internet search. ‘I'm not going to say it's not a big bet. It is. I'm not going to say it's not risky. It is,’ he said.”

(“Microsoft Makes Case for Online Push --- Ballmer Plans to Bulk Up Technology, Marketing And Pursue Acquisitions.” Robert A. Guth and Jessica E. Vascellaro. Wall Street Journal: July 25, 2008. pg. B.7)


"NOW I SEE WHY we didn't buy Yahoo; it would have been too costly and burdensome!"

Whether in hindsight or in foresight, watch out for the hidden challenges of buying into salvation through acquisition.

You bet your life! Learning is for those who value clearer vision.

Loose Firm


“In its early days, Chris Wallace's company didn't always have enough work to keep its staff fully occupied designing interactive Web sites for clients. But it didn't want to lose any talent. So he and his co-founders decided to tell employees they could pursue their own interests in their downtime, doing just about whatever they wanted, on the clock.

“An unexpected side benefit emerged. Employees spent some of their spare time writing music and building photography and video skills. When the company needed ideas to pitch to potential clients, it tapped into employees' personal projects. Mr. Wallace says he has had meetings with potential clients where 40% of the work he showed them was done by employees in their downtime…

“These days, downtime is less frequent. But management's philosophy is the same: As long as employees get their work done, they're free to pursue outside projects from their cubicles. The company continues to lean on employees' personal projects to help win new clients and expand the work it does with existing clients.

“The model works, Mr. Wallace says, because of the company's small size and collegial atmosphere. Most people in SuperGroup's Atlanta headquarters know what their colleagues are working on in their personal lives. Twice a week, the whole staff gathers to discuss both company business and personal projects. ‘A larger organization wouldn't have that intimate knowledge,’ says Mr. Wallace.”

(“Small Business Link: Tapping the Creativity of Downtime; Web-Design Firm Uses Projects Employees Pursue in Their Spare Time at Work to Help Win New Business.” by Simona Covel. Wall Street Journal: July 24, 2008. pg. B.5)


GRIP SAND TIGHTLY in your fist, and it will run out quickly.

Hold a bird in your hand just firmly enough to allow it to live, and perhaps it will sing.

We may be our work, and our work may be who we are. Why not magnify the whole, lightly in touch?

The Heart of the Matter


“Roche Holding AG's $44 billion bid to gain full ownership of Genentech Inc. took the staunchly independent biotechnology company by surprise and risks upsetting the highly successful -- but delicate -- relationship the partners have developed over two decades...

“Genentech employees expressed concern about the proposed takeover's impact on Genentech's culture and identity…

“Roche's chief executive, Severin Schwan, said repeatedly in a conference call… that Roche wants Genentech's drug researchers to keep working as an independent group.

“‘We will do everything to preserve the unique and science-driven culture of Genentech, something which made Genentech so successful and something we want to build on,’ he said in a separate interview.

“The danger, though, is that the big Swiss company will instead prove stifling to Genentech's scientists and other employees. When big drug makers have taken over biotech companies in the past, key scientists have often defected to start-ups or other opportunities...

“Michael Ross, a Ph.D. biochemist from the California Institute of Technology and Harvard who was an early Genentech employee, left six months after Roche acquired its initial stake in 1990.

“Dr. Ross… said Roche would be foolish to tamper with ‘a unique culture, a Valley culture that has aspects of Google and the old Hewlett-Packard.’ But, if Roche doesn't touch Genentech governance or culture, the deal ‘could be smart,’ Dr. Ross said…

“When Roche first bought control of Genentech in 1990, it allowed the company to keep working as an independent unit that decided which research to pursue and how to spend its money. Both companies have always maintained that this arms-length relationship is crucial to Genentech's success.

“Mr. Schwan said Roche would offer Genentech employees ‘attractive and competitive’ packages to try to keep them. But he said that ‘protecting their culture and providing an environment where they feel respected’ would be more important in retaining them.”

(“Roche Bid Blindsided Genentech; Top Executives to Meet Today to Discuss Swiss Drug Giant's $89-a-Share Offer for Rest of Biotech Firm.” Jeanne Whalen, Dana Cimilluca and Marilyn Chase. Wall Street Journal: July 22, 2008. pg. B.1)


MORE THAN MONEY, more than title... heart, soul, humanity, self-determination, and relationships of trust drive our world.

While mainstream pharmaceutical firms have tried to scientificize and bureaucratize innovation, deft CEOs understand that connection, touch and feel are the prime tools of delicate success.

Outsourcing Management


“Accenture… a leader in management consulting and technology outsourcing, profits handsomely by helping big corporations change continually to meet the demands of their markets…

“Like their brethren at McKinsey, Accenture's nearly 15,000 management consultants help businesses and governments implement strategic plans to improve such things as customer relationships, finance and performance management.

“It also takes on an outsourcing role for companies to help them lower costs, assuming responsibility for such functions as human resources, finance and information technology. Like EDS, it also handles IT-infrastructure outsourcing…

“CEO William Green has said clients are looking to enter new markets, lower costs, manage increased levels of risk and ‘tackle the headwinds’ of the economy. ‘That is the stuff that makes our business go,’ he said during the company's third-quarter conference call...

“The trends don't appear to be slackening. In late June, Accenture once again raised its outlook for revenue growth in the fiscal year ending Aug. 31, to the upper end of its previously announced 9%-12% guidance in local currency, and its forecast for diluted EPS to $2.63 to $2.65, from its previous range of $2.55 to $2.60.

“CEO Green said in the conference call that ‘we feel better looking at '09 than we felt this time last year when we were looking at '08.’ …

“[Tim] Fidler of Ariel Investments says that consulting is sometimes one of the first things to be cut during a recession, ‘Accenture projects are typically mission-critical to an organization.’

“And unlike its competitors, the same Accenture professionals who are selling projects to customers later help with actual work on the project. That's one reason, Fidler says, that Accenture's win rates are so high.”

(“The King of Cost Cutting.” Robin Goldwyn Blumenthal. Barron’s: July 21, 2008. pg. 21)


IF MANAGEMENT CAN'T handle strategic planning, customer relationships, finance, performance management, HR, IT -- the "mission-critical" responsibilities that "makes our business go" -- then what are they doing... ?

If they are not driving strategy, tactics or implementation, then what are they doing?

With such high-priced hand-holding so rampant, are shareholders paying twice... for managers who ought to be in touch, and for consultants who are not?

What are they doing?

Opportunity in Weakness


“Across the U.S. banking industry, a chasm is opening between the strong and the weak.

“More than a month after scooping up Bear Stearns Cos., J.P. Morgan Chase & Co. posted a smaller-than-expected 53% decline in quarterly profit, helped by underlying revenue strength in the New York company's main businesses. The results helped spur a rally by beleaguered bank stocks, even though the future looks as treacherous as ever.

“Like Wells Fargo & Co., the San Francisco-based bank that lifted the stock market with surprisingly decent second-quarter results Wednesday, J.P. Morgan's net income of $2 billion, or 54 cents a share, showed that some battered U.S. banks remain resilient enough to capitalize on the havoc rippling through the industry as the economy struggles.

“‘There's a pretty big significant differentiation between the people who like their balance sheets and the people who don't -- and we're all going to be living with our balance sheets for a while,’ said James Rohr, chairman and chief executive of PNC Financial Services Group Inc. …

“The Pittsburgh bank's profit rose 19% to $505 million, or $1.45 a share, from $423 million, or $1.22 a share in last year's second quarter. PNC largely stuck to its roots as many regional-bank rivals chased go-go growth during the housing boom, a decision that will haunt them for years.

“J.P. Morgan, the biggest U.S. bank by stock-market value, is benefiting from its emphasis on cost-cutting and a strategy of squeezing additional revenue from existing operations. Executives at both banks made it clear Thursday that they will accelerate efforts to snatch market share from badly wounded rivals.

“‘This is a tremendous time of opportunity for our company given the weakness we're seeing broadly,’ said Michael Cavanagh, chief financial officer of J.P. Morgan.”

(“Banking's Winners, Sinners Part Ways; J.P. Morgan, PNC Results Show Resilience; Comerica Net Reflects Toll on Regional Firms.” Robin Sidel. Wall Street Journal: July 18, 2008. pg. C.1)


ALWAYS REMEMBER who you are and what you represent. Remember what you stand for, what you will not stand for, and what you will not fall for.

As the balance sheet reflects the priorities and principles of a firm's management, so too our personal sense of balance is centered and grounded in our values and integrity.

Good clear values, and solid integrity allow us to keep our balance and to prosper in times of weakness.

Remember your roots.

Inflection


“In an effort to fuel growth, two of the biggest companies in the videogame-console business, Microsoft Corp. and Sony Corp., are announcing new games and services that target mainstream users as never before...

“A factor in the moves by Sony and Microsoft is the stunning commercial success of rival Nintendo Co. That game maker turned industry convention on its head over the past two years by going after casual game players with its Wii gaming system from the day the console went on sale. Nintendo did that by emphasizing fun, intuitive Wii games that use the console's motion-sensing controller rather than the pricey, hyper-realistic graphics favored by hard-core players.

“‘We are at an inflection point in our business where we've secured the core and now we're reaching out to mainstream audiences,’ said David Hufford, senior director for Microsoft's Xbox 360 business.

“In the U.S., Microsoft and Nintendo have each sold nearly the same number of their latest generation of consoles, trailed by Sony. Nintendo, though, is significantly outselling its competitors on a monthly basis.”

(“New Videogames Set Their Sights On Mainstream.” Nick Wingfield and Yukari Iwatani Kane. Wall Street Journal: July 15, 2008. pg. D.1)


IT CERTAINLY IS fun and intuitive to turn things upside down. And no doubt, the hard core is indeed a tough nut to crack -- consistenly at least...

Yet the primary questions remain: How do we add real value in the eyes, minds and hearts of our target? And, how do we do that in a way that no one else can?

Aye, there's the nub.
(the kernel)

Artistic "Science"


“Since the Enron scandal, a coterie of corporate-governance firms has emerged as standard-bearers for shareholder rights... The firms -- which include the Corporate Library and RiskMetrics Group's ISS Governance Services … sell, among other things, ratings that say whether a company is well governed or not.

“But a new study from Stanford University's law and business schools gives mostly dismal grades to four of the biggest rating services...

“Statistical tests run by the Stanford academics found little or no correlation between the different services' ratings. Pfizer, for instance, earned a perfect ‘100’ from ISS in 2005, but a ‘D’ from the Corporate Library. Lockheed Martin scored a 9.5 out of ten from GMI, but Corporate Library gave it its worst possible grade, an ‘F’ …

“Companies, fearing the scrutiny of shareholder activists or the wrath of the raters, sometimes do pirouettes to improve scores…

“The Stanford team found very little or no statistical evidence of links between the ratings and company performance, undermining the firms' very reason for being… On average, [ISS’s] top-ranked companies were more likely to have class-action lawsuits than its lowest-rated companies.

“‘The fact that our primary customers are investment managers suggests they are finding value in what we deliver,’ said Howard Sherman, CEO of GMI…

“The Stanford findings reinforce a growing sentiment that governance ratings are an art, not a science. ‘It points out that there's no grand unified theory of corporate governance,’ says Cary Klafter, vice president of legal and corporate affairs at Intel.”

(“Who's Watching the Watchdogs?” James Bandler, Doris Burke. Fortune: July 7, 2008. Vol. 158, Iss. 1; pg. 18)


THE DANCE IS A FRENZY, and the music is manufactured. Hey, if customers like it, then why not... ?

We look for what we want to discover. We see what we want to appear.

"Torture the data until they confess!"

Direction, Execution And Timing


“Vikram S. Pandit summoned 60 executives to Armonk, N.Y., last Tuesday to present his plan to buck up Citigroup, the beleaguered bank he runs…

“Mr. Pandit tried to lift spirits and brainstorm for ideas about how to reshape his company's culture. He pushed 60 top managers to build on his seven rules, which he unveiled in the last few weeks. Those rules include items like ‘client connectivity,’ ‘transparency’ and ‘product excellence.’

“But some Citigroup insiders roll their eyes at what they see as dull platitudes. Instead of embarking on a bold new course, as some investors had hoped, Mr. Pandit seems to be turning to the playbook of his predecessor, Charles O. Prince III, who was forced out last year...

“Mr. Pandit's executives say they are confident the strategy will pay off, but they have no illusions about how long it may take.

“‘This isn't like a sprint. This really is a marathon,’ said Gary L. Crittenden, Citigroup's finance chief. It could be two to three years before the bank's returns improve significantly, he said.

“Wall Street is growing impatient. ‘Some of the objectives set forth have been in motion for many years,’ said William Tanona, who follows Citigroup for Goldman Sachs. ‘With each passing quarter, there will be increased urgency for people to see results.’”


(“Appointments With Red Ink.” Eric Dash. The New York Times: July 15, 2008. pg. 1)

FIRST SURVIVAL, then growth, then thriving, then adaptation.

Mess up that sequence and you have chaos. Get it right and results will come into line, and spirits will soar.

Both And


“What is the CEO of a Global 500 company to do? Listen to the doom-and-gloom economists and act cautiously, or keep pushing into fast-growing but fragile economies? Smart executives are doing a bit of both, seeking new growth markets with the full understanding that their plans will be shaped and changed by global forces. Some of those trends are huge and long-lasting, like the rise of the global middle class. Others are not: Carrefour, for example, almost had a disaster on its hands when Chinese consumers threatened to boycott the chain over an event it could not foresee or control: A pro-Tibetan protester in Paris assaulted a wheelchair-bound Chinese Olympic torchbearer.

"Robert McDonald, Procter & Gamble's chief operating officer, has borrowed a military term to describe this new business world order: ‘It's a VUCA world,’ he says -- volatile, uncertain, complex, and ambiguous. ‘The idea that a butterfly flaps its wings in Africa and an earthquake occurs somewhere else in the world is our reality. It's no longer just a nice book that Thomas Friedman wrote,’ he adds, referring to the New York Times columnist's book on globalization. ‘It's my life.’”

(“The New New World Order.” Barney Gimbel. Fortune: July 21, 2008. Vol. 158, Iss. 2; pg. 156)


NO MORE either-or thinking.

Indeed, we live in a world where the only way to cope with volatility, uncertainty, complexity and ambiguity is to develop a fine touch for the craft of balancing through paradox.

This involves a bit of science infused with a very healthy dose of art -- perspective, interpretation, touch and feel.

The ancients comprehended this. Our immediate predecessors tended to forget. We must remember.

Not Unusual At All


“In 2005, radio-giant Clear Channel Communications Inc. learned that a writer named Alec Foege was planning a book about it. The book's working title, ‘The Monster That Ate Mass Media,’ suggested something less than a puff piece was in the works.

“Clear Channel mounted a counteroffensive, lining up its own writer to tell the Clear Channel story its way.

“As a result, dueling books about Clear Channel have recently hit the shelves. Mr. Foege's book -- now titled ‘Right of the Dial: The Rise of Clear Channel and the Fall of Commercial Radio’ -- chronicles the company's role in the consolidation of the radio industry.

“It competes with ‘Clear Vision: The Story of Clear Channel Communications,’ by Reed Bunzel, former editor of the trade magazine Radio Ink. Mr. Bunzel says Clear Channel paid him to do the book but declines to say how much. Another journalist says he was offered more than $100,000 to take on the project. The book doesn't disclose Mr. Bunzel's financial relationship with Clear Channel, but careful readers may notice that the company holds the copyright to the book.

“Self-published corporate histories aren't unusual. But Peter Hawes, editorial director of Greenwich Publishing, a publisher specializing in corporate histories, says he has ‘never seen a situation in which a company has said, Hey, there's another book coming out. We don't think we're going to like it. Let's get our own book out.’ …

“Lisa Dollinger, Clear Channel's communications director, spearheaded the book project. She calls it an ‘evenhanded look at Clear Channel’ that ‘was written from an independent point of view by a journalist with decades of experience in radio.’”

(“Why Clear Channel Tale Is Told Twice.” Sarah McBride. Wall Street Journal: July 10, 2008. pg. B.1)


FIRST IMPRESSIONS matter a great deal we know.

So do lasting impressions.

It's not unusual to be loved by anyone…
It's not unusual; it happens every day
No matter what you say
You find it happens all the time
Love will never do what you want it to
Why can't this crazy love be mine?
(Tom Jones)

Just the Numbers?


“Silicon Valley star Diane Greene was ousted as chief executive of VMware Inc. by its corporate parent, EMC Corp., which said the fast-expanding software company she co-founded had grown beyond her ability to manage it...

“Ms. Greene's removal ends an uneasy relationship in which she sought to guard VMware's independence while its stock price had fallen amid new competition...

“Joseph Tucci, chief executive of EMC and chairman of VMware, said in an interview that the VMware board concluded Ms. Greene lacked the experience to continue running a company that expects to have revenue nearing $2 billion this year. He said the board invited her to stay in a different ‘very active role,’ but she declined.

“Ms. Greene, reached at her home, said she wasn't allowed to talk about the situation.

“In past interviews, Ms. Greene has said she wanted more independence from EMC, a maker of large computer storage systems, to make her own decisions...

“EMC acquired VMware in 2003 for $635 million and retained 86% of its stock following an eye-popping initial public offering last summer…

“Mr. Tucci said that Ms. Greene had run VMware successfully and ‘built a great company,’ but ‘the board felt it was appropriate to bring in leadership with the experience to double or triple’ the company's sales. He said talks with Ms. Greene about a succession plan failed to reach agreement…

“Following the sale, Ms. Greene became an executive vice president of EMC, but remained on the West Coast. She sometimes visited a VMware development lab in Cambridge, Mass., without making the trip 30 miles west to EMC headquarters...

“Ms. Greene was a popular leader within her company, especially among women. EMC has often been criticized for having few women executives.”

(“VMware Ousts Star CEO as Growth Slows; Diane Greene's Removal, Forecast Hit Shares of Highflier and Parent EMC.” William M. Bulkeley. Wall Street Journal: July 9, 2008. pg. B.1)


IMPRESSIONS, IMAGE AND INTRIGUE shape most of our corporate work, and our personal worlds as well.

It looks like a rough and tumble game governed by the kid who owns the ball, or a beauty pageant where Miss Congeniality never seems to win.

Watch your numbers; watch your aura, and watch out for what's in the air...

What It's All About


“General Electric Co. plans to turn a tiny airplane-engine company in the Czech Republic into a competitor against archrival Pratt & Whitney, the leading maker of turboprop engines for commuter airlines, corporate aviation and private aircraft owners.

“GE's aviation unit this week completed the acquisition of Walter Engines, which has earned a reputation during its 85-year history for building rugged propeller engines used heavily in Eastern Europe and niche markets such as agricultural and cargo planes.

“Although the small-engine business will fill an important hole at the low end of GE's jet-engine product line, GE officials are also relishing the prospect of forcing Pratt & Whitney to cut prices on one of its most lucrative products. Pratt made a similar move two years ago when it began making spare parts for one of GE's best-selling jet engines, ratcheting up the companies' longstanding rivalry…

“‘We think the world deserves a choice,’ said Chet Fuller, general manager of marketing for GE Aviation…

“A spokeswoman for Pratt, which delivered almost 3,000 small airplane engines last year, said the company will ‘obviously take any competition seriously,’ but she noted that Pratt ‘has a 45-year head start,’ having produced more than 35,000 PT6 engines.”


(“GE Takes On Jet-Engine Rival; Goal Is to Build Up Small Czech Firm To Challenge Pratt.” J. Lynn Lunsford. Wall Street Journal: July 3, 2008. pg. B.2)

ALTRUISM -- That is so kind of General Electric to care about us!

And Pratt seems not to have a real worry in the world.

How nice; all is well...

Strategic? People!


“In the latest attempt to persuade restive investors it can fix itself, Yahoo! is reorganizing its management ranks. The widely expected revamp, unveiled June 26, centralizes product and sales operations under President Sue Decker.

“The reorganization comes a day after co-founder and Yahoo CEO Jerry Yang and Chairman Roy Bostock sent shareholders a public letter explaining why the company rejected a deal that would have combined its Web search operations with those of Microsoft.

“The public statements follow a flurry of management departures in the wake of failed takeover discussions with Microsoft. They also signal Yahoo is ratcheting up efforts to rally support for its independence ahead of an Aug. 1 annual shareholder meeting. Yang, Decker, Chief Financial Officer Blake Jorgensen, and Yahoo directors will take their appeal straight to large investors in a road show due to begin next week…

“The reorganization presents little fundamental change in Yahoo's top leadership, which has been roiled by high-level defections recently. In the past year, Yahoo has seen the departure of more than 100 managers, including top executives such as Jeff Weiner, former executive vice-president for Yahoo's Network Div., who left last week…

“Some of the people who left did so because they were growing weary of the off-and-on Microsoft negotiations. They decided to make their move after Microsoft walked away from its proposed buyout, as they faced many more months of uncertainty about Yahoo's prospects and direction. With the reorganization, they say, more talent could walk out the door. ‘The patience is growing thin’ within Yahoo's walls, says one former Yahoo executive. The sentiment is shared outside the walls, too.”


(“Yahoo Tries to Heal Itself – Again.” Robert Hof. www.businessweek.com.
June 27, 2008)

LEAD WITH STRATEGY, then people will follow?

Alternatively, lead people, and your strategy will emerge, coalesce and crystalize!

Strategic! Thinking?


“Any forecast calling for a ‘permanent’ shift in auto tastes based on a quantum as volatile as the price of gasoline is nuts.

“GM's leaders are not nuts, and yet to pour hundreds of millions into a race to launch an electric car, the Chevy Volt, guaranteed to lose money on every unit sold, begins to seem a peculiar strategy for a company in dire liquidity straits.

“With each hectic advance in the development process, the expected sticker price to consumers has gone up... At last leakage, GM is saying now the Volt may need a sticker price of $45,000.

“At best, the Volt will be an affluent family's third car. It will have to be plugged in for six hours a day... It won't be a car for a city dweller who parks on the street or in a public lot. It will travel 40 miles on a six-hour charge. After that, a small gas motor will kick in to recharge the battery while you drive. Some reports claim the Volt will get 50 mpg in this mode, but that's hallucinatory: If using a gasoline engine to power an electric motor were so efficient, the streets would be full of such vehicles...

“Customers value flexibility in their vehicles. For a car with the Volt's narrow usability to sell would require an unlikely revolution in consumer behavior...

“And for those who think the Volt's justification is greenhouse emissions, notice that electric cars play Three Card Monte with energy inputs: It all depends on where the electricity is coming from…

“GM executives are not nuts. They justify the costs and risks of the Volt as a way of changing GM's image in the minds of consumers and politicians. To commit a pun, the Volt is GM's vehicle for making a bailout of GM politically acceptable...

“CEO Rick Wagoner last week laid out the case to Barack Obama personally for turning GM into a ward of the state, by way of direct and indirect subsidies… Shareholders should note that a big part of the company's turnaround gamble consists also of eliciting favor once again from Washington.”


(“Business World: What Is GM Thinking?” Holman W. Jenkins, Jr.. Wall Street Journal: July 2, 2008. pg. A.11)

PERCEPTIONS AND PERSPECTIVES get managed first. Interpretations come next. All hinge on values, beliefs and assumptions.

Now we get to work, working to drive the way we are seen, and seeing as we need to so we can do what we want to do.

Both Sides Now


“For a decade it appeared there was no such thing as too many Starbucks for U.S. coffee drinkers, whose willingness to buy its $4 lattes and dark drip brews rationalized a second green-and-white mermaid awning just down the street — and sometimes even a third. But in a sign that those days are over, Starbucks Corp. announced Tuesday it will close 600 company-operated stores in the next year as the faltering U.S. economy hastened the pain caused by the company's own rapid expansion.

“Starbucks shares, which have been falling steadily for nearly two years, jumped 72 cents, or 4.6 percent, in extended trading after the announcement…

“Starbucks is closing 19 percent of all U.S. company-operated stores that opened in the last two years, Chief Financial Officer Pete Bocian said…

“In total, the company forecast up to $348 million in charges related to the closures, $200 million to be booked in the fiscal third quarter ended June 30. Starbucks reports third-quarter results at the end of July.

“The company had previously planned to shut 100 stores. The 500 more that will be closed had been on an internal watch list for some time. They were not profitable, not expected to be profitable in the foreseeable future…

“Some analysts had wondered whether Starbucks' explosive growth in the U.S. would come back to haunt it as the market became saturated.

“But before Tuesday, the company avoided acknowledging that saturation was an issue and pinned weak financial results and adjustments to new store openings on the economy…

“‘We believe we still have opportunities to open new locations with strong returns on capital,’ Bocian said.”


(“Starbucks to close 600 US stores, rein in growth.” by Jessica Mintz of the Associated Press. news.yahoo.com. July 2, 2008)

GROWTH OR PROFIT, what will it be? How long and how well can we pursue both sides of this balancing act?

What will be rewarded? How will that enable the ongoing accomplishment of our mission?

Emergence, growth, maturity, decline -- all systems move through life cycles as surely as sunshine follows rain, and rain follows the sun.

What are we learning and changing within each stage?

I've looked at life from both sides now
From up and down, and still somehow
It's life's illusions I recall...
(Joni Mitchell)

Rational AND Intuitive -- Just the Tip...


“Fishing in the stream of consciousness, researchers now can detect our intentions and predict our choices before we are aware of them ourselves. The brain, they have found, appears to make up its mind 10 seconds before we become conscious of a decision -- an eternity at the speed of thought.

“Their findings challenge conventional notions of choice.

“‘We think our decisions are conscious,’ said neuroscientist John-Dylan Haynes at the Bernstein Center for Computational Neuroscience in Berlin, who is pioneering this research. ‘But these data show that consciousness is just the tip of the iceberg’ …

“In ways we are only beginning to understand, the synapses and neurons in the human nervous system work in concert to perceive the world around them, to learn from their perceptions, to remember important experiences, to plan ahead, and to decide and act on incomplete information…

“Such experiments suggest that our best reasons for some choices we make are understood only by our cells. The findings lend credence to researchers who argue that many important decisions may be best made by going with our gut -- not by thinking about them too much.

“Dutch researchers led by psychologist Ap Dijksterhuis at the University of Amsterdam recently found that people struggling to make relatively complicated consumer choices -- which car to buy, apartment to rent or vacation to take -- appeared to make sounder decisions when they were distracted and unable to focus consciously on the problem.

“Moreover, the more factors to be considered in a decision, the more likely the unconscious brain handled it all better they reported.”

(“Currents; Science Journal: Get Out of Your Own Way; Studies Show the Value of Not Overthinking a Decision.” Robert Lee Hotz. Wall Street Journal: June 27, 2008. pg. A.9)


I THINK THAT I am thinking. What do we see when we observe our own thought processes?

Stop the war between the head and the heart, the mind and the gut, knowing and feeling. Learn to balance both sides; add richness to your understanding.

Yang AND Yin.