We especially like the smart context offered by an Austrian advocate of how to think about “going green” in all things we do on the planet Earth:
“Why just target sustainability – we should focus on replenishment instead. Always think of the next generation of people who follow us… the children, and their children.”
We also note from the Wall Street Journal (Aug 11):
25% of the USA’s largest publicly held (Fortune 500) companies now have committees from their Boards of Directors overseeing environmental issues, compared with just 10% five years ago. Such committees make sure company executives effectively manage conservation efforts, new environmentally friendly ventures (like wind power), and compliance with environmental regulations.
We hope many more companies, both large and small, see this as a SmartMove trend around the world. Everyone and every institution will benefit.
Thursday, August 14, 2008
Friday, August 8, 2008
Creating Sustaining Wealth in Enterprises – The Case AGAINST Shareholder Activists
“Shareholder activism can raise the stock price of a particular company, to benefit particular shareholders, in the short run. But it lowers the value of the stock market as a whole, for average investors, in the long run.
This is because the shareholder activists use their ownership position to pressure boards of directors into strategies they claim ‘unlock shareholder value,’ and then dump their stock as soon as the stock price rises.”
Often they leave behind a company that is over-leveraged, depleted of cash, and unable to invest for future, longer term growth. The result is stagnation or worse, loss of jobs, and at times ultimate failure of the enterprise.
(Quoted excerpts from the Wall Street Journal)
This is because the shareholder activists use their ownership position to pressure boards of directors into strategies they claim ‘unlock shareholder value,’ and then dump their stock as soon as the stock price rises.”
Often they leave behind a company that is over-leveraged, depleted of cash, and unable to invest for future, longer term growth. The result is stagnation or worse, loss of jobs, and at times ultimate failure of the enterprise.
(Quoted excerpts from the Wall Street Journal)
Thursday, August 7, 2008
China’s Confucion Heritage Matches Old – School Business Guru
Peter Drucker, the Austrian-born management scholar who spent most of his career practicing in the United States, and died at age 95 in 2005, is making a huge comeback in China. Now considered “old-school” in Western economies, the Chinese are embracing many of his practices. In the past few years, 14 Drucker academies have been established in major cities, where his writings form the central part of the curriculum. The intention is to teach management essentials needed to support China’s booming economy. Last year alone, 6,000 Chinese managers graduated from these academies. (Wall Street Journal)
We particularly like Mr. Drucker’s “Timeless Advice”:
· The essential activities of business are innovation and marketing; It’s a mistake to fixate on profits.
· Good management should make work productive and the worker effective.
· Set objectives. Set separate ones for each crucial area of the business.
· Take social responsibility seriously. An enterprise exists only as long as society believes it does a necessary and useful job.
· Quality is what the customer wants, not what’s expensive and hard to do.
· Knowledge workers in modern organizations may manage no one, yet their decisions’ impact can be comparable to what executives do.
We particularly like Mr. Drucker’s “Timeless Advice”:
· The essential activities of business are innovation and marketing; It’s a mistake to fixate on profits.
· Good management should make work productive and the worker effective.
· Set objectives. Set separate ones for each crucial area of the business.
· Take social responsibility seriously. An enterprise exists only as long as society believes it does a necessary and useful job.
· Quality is what the customer wants, not what’s expensive and hard to do.
· Knowledge workers in modern organizations may manage no one, yet their decisions’ impact can be comparable to what executives do.
India Is Becoming A World Class Competitor – BUT It Remains a Nation of Huge Disparities
“India has more billionaires than Japan, but it also has 200 million people below the poverty line. The nation’s world-class engineers have underpinned a global outsourcing boom, but 80% of the country’s children drop out of school by the time they reach 15. India’s skilled surgeons have fueled a lucrative medical-tourism industry, but at rural public-health clinics, doctors frequently fail to show up.” (Wall Street Journal, July 23)
INNOVATION - An Indian Global Company Grows by Encouraging Innovation
India’s Mahindra & Mahindra is a $6+billion (US) diversified company whose CEO was interviewed in the July-August 2008 Harvard Business Review magazine.
We like what he had to say about creativity and innovation and share some excerpts for your consideration as smart moves.
“I’m convinced that Indian companies have almost caught up with the productivity frontier today. What’s going to distinguish us in the future is our ability to make products and services that capture the customer’s imagination.”
“I want us to observe the customer for hours, watching the person, say, vacuum floors. We will come away with tons of ideas about what a vacuum cleaner should do and what it should look like. Magic happens when companies observe customers in that way and develop new products and services accordingly.”
“So you need Insight, Design, Experimentation, Added value, and Sales plans for innovation to work. IDEAS.”
We like what he had to say about creativity and innovation and share some excerpts for your consideration as smart moves.
“I’m convinced that Indian companies have almost caught up with the productivity frontier today. What’s going to distinguish us in the future is our ability to make products and services that capture the customer’s imagination.”
“I want us to observe the customer for hours, watching the person, say, vacuum floors. We will come away with tons of ideas about what a vacuum cleaner should do and what it should look like. Magic happens when companies observe customers in that way and develop new products and services accordingly.”
“So you need Insight, Design, Experimentation, Added value, and Sales plans for innovation to work. IDEAS.”
SCIENCE - Artificial Light Is the Latest Form of Pollution
From the Wall Street Journal (July 25), “Around the world, the night sky is vanishing in a fog of artificial light, which a coalition of naturalists, astronomers and medical researchers consider one of the fastest growing forms of pollution, with consequences for wildlife, people’s health—and the human spirit.
About two-thirds of the world’s population, no longer sees a starry sky where they live. For much of the world, it never even gets dark enough for human eyes to adjust to night vision.” Scientists have measured that the glare of city lights even two hundred miles away can visibly alter the natural night lightscape of over 2,000 stars. Italian researchers have calculated that the amount of artificial light worldwide has tripled since 1970.
There is some data that suggests that prolonged “night shift” exposure to artificial light may be linked to increases in certain types of cancer, including colorectal and breast. And the impact of artificial light on animal breeding cycles and migratory patterns has long been noted.
In addition to saving money on electricity, we think that turning off your lights at night, including the one over the front door, might just be a smart move.
About two-thirds of the world’s population, no longer sees a starry sky where they live. For much of the world, it never even gets dark enough for human eyes to adjust to night vision.” Scientists have measured that the glare of city lights even two hundred miles away can visibly alter the natural night lightscape of over 2,000 stars. Italian researchers have calculated that the amount of artificial light worldwide has tripled since 1970.
There is some data that suggests that prolonged “night shift” exposure to artificial light may be linked to increases in certain types of cancer, including colorectal and breast. And the impact of artificial light on animal breeding cycles and migratory patterns has long been noted.
In addition to saving money on electricity, we think that turning off your lights at night, including the one over the front door, might just be a smart move.
The Demise of the Doha Trade Talks – A Lost Opportunity
The collapse of the Doha Trade Round at the end of July should be viewed as a true setback for all world economies. The real battle among the trade talk participants was between those who want to expand the era of global trade and prosperity, and those who want to carve out their own protected niches. The protectionists, well meaning but misguided, we believe, caused this failure to reach expanded free trade agreements.
Free trade has proven to be a strong path to improved life styles. To quote the Wall Street Journal (July 31), “In 1990, trade represented about 40% of world GDP (gross domestic production), according to the World Bank. By 2004, trade exceeded 55% of world GDP, and the global economy had expanded by 50%. This opened vast new opportunities for global business, spreading competition and innovation that have helped to raise the living standards across the globe.”
“Having defeated Doha, the world’s protectionists will now press forward with their special-interest agendas, hoping to build a lattice-work of cartels and managed trade. Doha’s failure is a lost opportunity, but it could become much worse if it leads to the tariffs and currency devaluations that led to and exacerbated the Great Depression.”
We hope for a new surge of global economic leadership soon to help restore the positive free trade momentum among all countries. It would be a smart move!
Free trade has proven to be a strong path to improved life styles. To quote the Wall Street Journal (July 31), “In 1990, trade represented about 40% of world GDP (gross domestic production), according to the World Bank. By 2004, trade exceeded 55% of world GDP, and the global economy had expanded by 50%. This opened vast new opportunities for global business, spreading competition and innovation that have helped to raise the living standards across the globe.”
“Having defeated Doha, the world’s protectionists will now press forward with their special-interest agendas, hoping to build a lattice-work of cartels and managed trade. Doha’s failure is a lost opportunity, but it could become much worse if it leads to the tariffs and currency devaluations that led to and exacerbated the Great Depression.”
We hope for a new surge of global economic leadership soon to help restore the positive free trade momentum among all countries. It would be a smart move!
ECONOMICS - Productivity Improvements Essential to Healthy Economies
Each country’s economy in the world benefits when its productivity grows. Investing in infrastructure, efficient automation, and information technology are examples of actions that often drive growth in productivity over time, and provide meaningful gains in the standard of living across each economy.
Currently, despite the economic downturn in the U.S., productivity (worker productivity, measured in output per hour) continues strong, growing at a rate of 2.5% since the end of 2007. Typically, in a period of economic weakness, productivity declines.
To quote the Wall Street Journal (Aug. 4), “That productivity is staying strong even in bad times has important implications for economic growth, inflation, employment and, ultimately, living standards. Strong productivity growth, by countering inflation from energy and commodities, allows the central bank to keep interest rates lower than it otherwise might, helping it stoke the economy.”
In the U.S., “the productivity improvement is being driven by a shift from less productive domestic sectors like home building into exporting industries, which tend to be highly efficient.”
Ribero and Crane hope that other countries will continue to focus on productivity improvement, especially as the world economy appears to be slowing. It will prove to be the smart thing to do!
Currently, despite the economic downturn in the U.S., productivity (worker productivity, measured in output per hour) continues strong, growing at a rate of 2.5% since the end of 2007. Typically, in a period of economic weakness, productivity declines.
To quote the Wall Street Journal (Aug. 4), “That productivity is staying strong even in bad times has important implications for economic growth, inflation, employment and, ultimately, living standards. Strong productivity growth, by countering inflation from energy and commodities, allows the central bank to keep interest rates lower than it otherwise might, helping it stoke the economy.”
In the U.S., “the productivity improvement is being driven by a shift from less productive domestic sectors like home building into exporting industries, which tend to be highly efficient.”
Ribero and Crane hope that other countries will continue to focus on productivity improvement, especially as the world economy appears to be slowing. It will prove to be the smart thing to do!
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