| The acquirer |
| 04/04/25 | | Management |
"The story of how Hiroshi Nojima turned a sleepy family business into one of the top performers on the Tokyo Stock Exchange"
|
| Ghost jobs |
| 11/10/24 | | Management |
"ghost jobs contribute to job search fatigue, increased application costs, and potentially longer periods of unemployment. These effects can skew job seekers' expectations and lead to a misallocation of resources, as they invest time and effort in pursuing positions that are not genuinely available. This, in turn, can elevate reservation wages and disrupt the equilibrium in job search models, affecting overall labor market efficiency."
|
| You cannot cut your way to profitability |
| 07/27/24 | | Management |
"A former colleague of mine who covered bank stocks likes to say that banks cannot cut their way to profitability. In my view this applies not just to banks but to every high-tech manufacturer and most services companies. In other words, most of our modern economy. You cannot cut costs to become more profitable. You can only invest your way to profitability."
|
| Companies are lousy market timers |
| 07/06/24 | | Management |
"The reason to rain on the buyback parade is that companies on average are lousy market timers: they tend to repurchase shares when prices are high."
|
| Beware of companies moving targets |
| 07/06/24 | | Management |
"We are approaching the end of the second quarter and soon, companies will start reporting their results for the previous three months. Unfortunately, as research from D.A.T.A. shows, the results for Q2 and Q3 tend to be the least truthful results in the year"
|
| The quotations of chairman Ray |
| 04/21/24 | | Management |
"Modern postindustrial capitalism can endow vast amounts of wealth upon individuals. When the financial media, desperate for advertising revenue, deifies successful businessmen this frequently divorces them from reality, an effect amplified by lack of feedback from employees and associates petrified by their boss's power over them."
|
| Return-to-office mandates |
| 01/28/24 | | Management |
"Results of our determinant analyses are consistent with managers using RTO mandates to reassert control over employees and blame employees as a scapegoat for bad firm performance. Also, our findings do not support the argument that managers impose mandate because they believe RTO increases firm values. Further, our difference in differences tests report significant declines in employees' job satisfactions mandates but no significant changes in financial performance or firm values after RTO mandates."
|
| Find the bottleneck first |
| 05/14/23 | | Management |
"To understand monkeys and pedestals, imagine that you're trying to teach a monkey to juggle flaming torches while it stands on a pedestal in the town square. Two tasks are competing for your money, time, and attention: training the monkey and building the pedestal. One is a possibly intractable obstacle. And the other is building the pedestal."
|
| The value of projects |
| 02/05/23 | | Management |
"We find that discounting based on expected returns (such as variants on the CAPM or multi-factor model), performs very poorly. Discounting with an Implied Cost of Capital (ICC), imputed from comparable firms, obtains much better results. ... Finally, we show that under standard assumptions about the production function, the value loss from using the CAPM can be sizable, of the order of 10%."
|
| No customer service |
| 01/29/23 | | Management |
"When there's no option to pick up the phone, at some point it obviously creates all kinds of havoc in customers' lives"
|
| Job interview nightmare |
| 01/15/23 | | Management |
"Companies are seemingly coming up with new, higher, and harder hoops to jump through at every turn. That translates to endless rounds of interviews, various arbitrary tests, and complex exercises and presentations that entail hours of work and prep. There can be good reasons for firms to do this - they really want to make sure they get the right person, and they're trying to reduce biases - but it's hard not to feel like it can just be too much."
|
| The Cheesecake Factory marvel |
| 12/31/22 | | Management |
"Common sense for restaurant success is actually the opposite of everything the Cheesecake Factory does. Minimize labor, minimize ingredients, minimize everything. Restaurants are expensive to maintain and trimming excess helps survivability. The restaurant industry revolves around the thinnest of margins, and the common refrain (which should be familiar to anyone who's ever seen an episode of Kitchen Nightmares) is to simplify everything."
|
| CFO age and financial misreporting |
| 11/27/22 | | Management |
"We find that the perverse effect of equity incentives on financial misreporting is weaker for older chief financial officers (CFOs) than for younger CFOs. We attribute this to differences in risk preferences associated with age."
|
| Toxic workers are bad for business |
| 11/06/22 | | Management |
"We see that even if a company manages to hire a top 1% superstar employee the cost savings are still only about half of the cost savings of replacing a toxic employee with an average employee."
|
| Cash is the only thing |
| 08/07/21 | | Management |
"The only thing that helps a company survive these extreme revenue shocks is access to cash. Companies that either had lots of liquidity at hand or could tap into existing credit lines to increase their cash at hand were more likely to survive and recovered more quickly."
|
| Who invented Flamin' Hot Cheetos? |
| 05/30/21 | | Management |
"We have interviewed multiple personnel who were involved in the test market, and all of them indicate that Richard was not involved in any capacity in the test market."
|
| Rookie CEOs outperform |
| 01/10/21 | | Management |
"In a study of 855 S&P 500 CEOs appointed over a 20-year period, the researchers found that those with experience in the role consistently underperformed their novice counterparts over the medium to long term. First-timers led their companies to higher market-adjusted total shareholder returns, with less volatility in the stock price. Among CEOs who headed two successive companies, 70% performed better the first time - and for more than 60%, their second companies failed to keep pace with the overall stock market."
|
| The path ahead |
| 04/04/20 | | Management |
"Since then, things have slid further and faster economically than anyone could have imagined. As of today, we have been spared what was predicted in the more catastrophic medical forecasts, but what started as theoretical and distant feels dangerous and ever-present. I have two friends-of-friends in the ICU with it, the first COVID-19 death in Missouri was in Columbia last week, and you can't read about what's taking place in NYC and react with anything other than deep concern."
|
| The open-office trap |
| 02/01/20 | | Management |
"He found that, though open offices often fostered a symbolic sense of organizational mission, making employees feel like part of a more laid-back, innovative enterprise, they were damaging to the workers. attention spans, productivity, creative thinking, and satisfaction. Compared with standard offices, employees experienced more uncontrolled interactions, higher levels of stress, and lower levels of concentration and motivation."
|
| Paid for luck |
| 12/03/19 | | Management |
"This paper shows that the standard form of option compensation, with non-indexed at-the-money options, is very far from optimal, though, as its pay-for-luck component is in the ballpark of 90%, and its motivational power is rather low."
|
| Junkyard billionaire |
| 11/22/19 | | Management |
"The business of selling damaged autos has never been better for Copart founder Willis Johnson, a gold-chain wearing Oklahoma native who's turned drivers' misfortunes into a $1.9 billion fortune"
|
| 4-day workweek |
| 11/08/19 | | Management |
"Workers at Microsoft Japan enjoyed an enviable perk this summer: working four days a week, enjoying a three-day weekend - and getting their normal, five-day paycheck. The result, the company says, was a productivity boost of 40%."
|
| Trouble in the land of OZK |
| 08/31/19 | | Management |
"Construction lending is a high-risk business; it tends to do well when the economy is doing well and tends to be painful during a recession"
|
| Don't open a restaurant |
| 03/25/19 | | Management |
"there is a limit to what people will pay for a sandwich and what people feel comfortable paying for a sandwich. Despite the quality of the ingredients inside, despite the amount of labor that goes into all that, there's a certain amount you can charge for a sandwich and people will not pay any more." [audio]
|
| The MBA Myth and the Cult of the CEO |
| 03/04/19 | | Management |
"MBA programs simply do not produce CEOs who are better at running companies, if performance is measured by stock price return."
|
| On the road with Jim Pattison |
| 12/26/18 | | Management |
"Pattison is often dubbed Canada's Warren Buffett - a trope that underscores how relatively unknown he remains outside Canada despite a conglomerate that operates in 85 countries across a dizzying array of industries"
|
| The story of Gert Boyle |
| 09/10/18 | | Management |
"In 1972, Gert Boyle's bankers came to see her. They told her the business was failing and she needed to find a buyer for it. She found an investor that was willing to buy the business for $1,400. She kicked the investor out of her office and yelled: 'I can run the shop into the ground myself for that money!'"
|
| What happened at GE? |
| 05/28/18 | | Management |
"Few corporate meltdowns have been as swift and dramatic as General Electric's over the past 18 months - but the problems started long before that."
|
| Bezos went thermonuclear on Diapers.com |
| 05/23/18 | | Management |
"First, in 2009, Amazon sent a senior vice president to have lunch with the founders of the startup behind Diapers.com, called Quidsi. He warned them that Amazon was thinking about getting into the diaper business and suggested they think about selling. As Stone tells it, this was not a friendly suggestion. It was more like the kind of offer you can't refuse."
|
| Pulling the thread with Tren Griffin |
| 05/22/18 | | Management |
"Tren Griffin has been writing a weekly blog post that highlights things he has learned from various investors, businesspeople, musicians, comedians, and more. Lately, he has also been tackling individual businesses, and broad topics like scaling, competitive forces, and product market fit." [audio]
|
| CEOs don't make 350x more than employees |
| 05/14/18 | | Management |
"Once we make a more statistically valid apples-to-apples comparison, the CEO-to-worker compensation ratio falls by 50 percent from the AFL-CIO.s expected 350-to-1 ratio to 177-to-1 once we consider total compensation for both CEOs and full-time (40 hours per week) rank-and-file workers employed by companies with 500 or more workers. If we assume a 60-hour work week for the average worker (to be comparable to the work week of an average CEO), the CEO-to-worker compensation ratio falls by two-thirds to only 118-to-1 for average CEO pay and 104-to-1 for median CEO pay. Further, even if we could confiscate 100 percent of the compensation of all S&P 500 CEOs, the typical rank-and-file worker would probably get about $1 per week in additional after-tax earnings."
|
| How to kill your economy |
| 03/05/18 | | Management |
"80 percent of CEOs surveyed in one study said they'd pass up making an investment that would fuel a decade's worth of innovation if it meant they'd miss a quarter of earnings results"
|
| Lessons from Waffle House |
| 02/12/18 | | Management |
"You go in there and everyone's drunk. You know everyone's drunk in Waffle House because they have pictures of the food on the menu. How drunk do you have to be to not remember what a waffle looks like?"
|
| Why competitive advantages die |
| 02/12/18 | | Management |
"The only thing harder than gaining a competitive edge is not losing that advantage when you have one. That's as true for careers and investment strategies as it is for business. And since people are naturally optimistic, there's a tendency to put more thought into finding an edge than not losing it once you find one."
|
| Creative investing |
| 01/22/18 | | Management |
"Ali views the world with a fresh set of eyes, and has already become an expert at identifying new investment opportunities where others have not. As the second prodigy 26 year old in as many weeks on the podcast, these young guns are making me feel like an ancient 32 year old." [audio]
|
| Rose Blumkin interview |
| 01/22/18 | | Management |
"A little gem of a 1980s NBC News story about Rose Blumkin" [video]
|
| The gospel according to Michael Porter |
| 11/11/17 | | Management |
"The old-school fundamental value investors who prize Porter's frameworks have come under fire from a familiar source: the Chicago school. Chicago's Fama has published studies showing that actively managed mutual funds underperform the market and that small value companies - not large market leaders, as Porter would have it - are the best-returning stocks. Fama's works suggests that Benjamin Graham's instincts were right: The real money is to be made betting on the Davids of the world, not the Goliaths."
|
| Morally bankrupt |
| 06/11/17 | | Management |
"Most Americans have assumed their bank accounts are sacrosanct. But with the major scandal unfolding at Wells Fargo, angry former employees illuminate the alarming pressure that allegedly led local bankers to defraud perhaps more than a million customers."
|
| Cheap Chick-fil-A franchise |
| 04/23/17 | | Management |
"The barrier to entry for being a franchisee is never going to be money"
|
| The uselessness of job interviews |
| 04/16/17 | | Management |
"Research that my colleagues and I have conducted shows that the problem with interviews is worse than irrelevance: They can be harmful, undercutting the impact of other, more valuable information about interviewees."
|
| Selling pressure at TD |
| 03/12/17 | | Management |
"A CBC report earlier this week about TD employees pressured to meet high sales revenue goals has touched off a firestorm of reaction from TD employees across the country - some of whom admit they have broken the law at their customers' expense in a desperate bid to meet sales targets and keep their jobs."
|
| Learn from James Sinegal |
| 01/01/17 | | Management |
"It has a frantic desire to serve customers a little better every year. When other companies find ways to save money, they turn it into profit. Sinegal passes it on to customers. It's almost a religious duty. He's sacrificing short-term profits for long-term success."
|
| Learn from Ben Horowitz |
| 12/24/16 | | Management |
"When I was a CEO, the books on management that I read weren't very much help after the first few months on the job. They were all designed to give you directions on how not to screw up your company. But it doesn't take long before you get beyond that and you're like OK I've screwed up my company; now what do I do? Most books on management are written by management consultants, and they study successful companies after they've succeeded, so they only hear winning stories."
|
| Lazy work, good work |
| 12/17/16 | | Management |
"Rockefeller's job wasn't to drill wells, load trains, or move barrels. It was to make good decisions. And making decisions requires, more than anything, quiet time alone in your own head to think a problem through. Rockefeller's product - his deliverable - wasn't what he did with this hands, or even his words. It was what he figured out inside his head. So that's where he spent most of his time and energy."
|
| How to manage an overvalued stock |
| 11/27/16 | | Management |
"It is an unusual situation, but the best strategy for a company with an overvalued stock is to try to grow their way out of it, usually through mergers and acquisitions. The twist I offer you at the end of my piece is this: thus, watch highly acquisitive firms. Not all of them are overvalued or fraudulent, but some will be. Avoid the shares of those firms."
|
| ILTB: Brent Beshore interview |
| 11/13/16 | | Management |
"Brent has a very specific mission with this company, to cultivate a disaster resistant, compound interest machine. At just 33 years of age he has already built a portfolio of private companies that has produced impressive results. He's done all this out of the limelight and with no outside investors. Brent discusses his rewarding but difficult journey and what he has learned, including sourcing and evaluating businesses, how he and his team have improved profitability at his portfolio companies after acquisition and so much more."
|
| Mortgage guidelines |
| 09/17/16 | | Management |
"Canadian banks allow foreign clients with no credit history, including students, to qualify for uninsured mortgages without proving the sources of their income - a practice that exempts non-Canadians who have money in the bank from the scrutiny domestic borrowers face when buying a home or an investment property."
|
| A culture problem at Wells |
| 09/11/16 | | Management |
"Everyone hates paying bank fees. But imagine paying fees on a ghost account you didn't even sign up for. That's exactly what happened to Wells Fargo customers nationwide."
|
| Culture eats strategy |
| 01/09/16 | | Management |
"Nucor probably didn't have any core attributes that were unavailable to its competitors. It simply made better choices and was more fanatical about sticking to them. The resulting success was deserved. This is why culture eats strategy."
|
| Chipping away at financial reporting quality |
| 11/28/15 | | Management |
"Chief financial officers are responsible for managing the financial reporting process. We test whether the quality of a firm's financial reports is a function of the effort expended by the CFO. Using golfing records to measure leisure consumption, we first show that CFOs consume more leisure when they have lower economic incentives to work. We show further that higher levels of CFO leisure are negatively associated with a number of indicators of financial reporting quality. The use of firm fixed effects and an instrumental variable analysis suggest that the observed relations are causal. Further tests indicate that higher leisure consumption is associated with shorter conference calls with a more uncertain tone. Finally, the effects of lower quality reporting are demonstrated by results linking CFO leisure with analysts' forecast dispersion and weaker earnings response coefficients."
|
| Playing the long game |
| 09/25/15 | | Management |
"The premise that you're going to run a business, and that if someone is in need, I'm going to charge them a ton of money, is completely wrong"
|
| The short-termism myth |
| 08/24/15 | | Management |
"To the extent that companies are underinvesting in the future, the blame lies not with investors but with executives. The pay of many C.E.O.s is tied to factors like short-term earnings, rather than to longer-term metrics, which naturally fosters myopia."
|
| GM Recalls |
| 06/20/14 | | Management |
"Yet in one indirect way, Oakley tried to rouse concern. In a draft of a service bulletin to dealers, he included the term 'stall,' a 'hot' word known to attract attention. Had it actually gone out to car sellers, federal regulators would have most likely seen it. But as they had with Kelley three years before, GM's product investigators tamped down the response, striking the language. It was one of the many occasions in which GM engineers failed to link the ignition switch position and disabled airbags, Valukas concluded."
|
| The case for banning tips |
| 08/10/13 | | Management |
"For over eight years, I was the owner and operator of San Diego's farm-to-table restaurant The Linkery, until we closed it this summer to move to San Francisco. At first, we ran the Linkery like every other restaurant in America, letting tips provide compensation and motivation for our team. In our second year, however, we tired of the tip system, and we eliminated tipping from our restaurant. We instead applied a straight 18% service charge to all dining-in checks, and refused to accept any further payment. We became the first and, for years, the only table-service restaurant in America where you couldn't pay more money than the amount we charged you. You can guess what happened. Our service improved, our revenue went up, and both our business and our employees made more money."
|
| Business out of excuses |
| 07/01/12 | | Management |
"As other economies stumble, the Canadian economy looks golden. But any gold is badly tarnished when it comes to productivity. Output per hour worked in the Canadian business sector has grown less than 1% per annum over the past decade. Productivity from labour and capital combined has not grown at all. This is one of the worst records in Canadian history and one of the worst among developed economies."
|
| How to make a fortune after 50 |
| 12/29/11 | | Management |
"At an age when others might ready for pre-retirement, some folks pass age 50 determined to start a new life in the business world - and succeed beyond their rosiest business plan projections."
|
| Why McDonald's wins |
| 08/27/11 | | Management |
"Employees and analysts say he's guided by a zeal for satisfying customers, even if it comes at the expense of his own ideas and preferences. A few years ago the company did extensive testing on new coffee-cup lids and rolled out a version that consumers liked -- and that Skinner, who happens to drink a lot of coffee, really didn't. Rather than overrule the masses, Skinner came up with his own solution: He keeps a stash of the old lids on hand."
|
| Tales of when legends leave |
| 08/26/11 | | Management |
"The founder of a successful corporation steps down. Then what? At Ford Motor Co. and Walt Disney Co., long periods of stagnation or decline, followed by renewal. At Wal-Mart Stores Inc., continued success for a time, then new challenges. Now it is Apple Inc.'s turn, following Steve Jobs's resignation as CEO on Wednesday."
|
| Is he economically rational? |
| 07/22/11 | | Management |
"I think of it as training to understand managements - see if they act like owners maximizing long-term profits, or as workers aiming to maximize their pay packets. You will earn more with companies that think like owners."
|
| When two-thirds isn't enough |
| 06/15/11 | | Management |
"It's one of the great anomalies of our ownership society: shareholders own companies, but executives can easily slap them down. The hired help, in other words, holds the cards. The owners of Cedar Fair L.P., a leisure and entertainment company in Sandusky, Ohio, have learned this the hard way."
|
| Can progressives fix the U.S. postal service? |
| 06/01/11 | | Management |
"But a desire to maximize profits and an aversion to losing money leads to certain efficiencies that ought to be exploited in less fraught enterprises. At UPS and FedEx, management has a powerful incentive to hold down overall labor costs, and to preserve the flexibility and adaptability of the respective companies. When USPS negotiates with the any of the four unions that represent its employees, the dynamic is completely different: management has fewer incentives to hold down costs, even as labor exercises substantially more clout due to is political influence.The results are ludicrous"
|
| The golden age of drive-thru |
| 06/01/11 | | Management |
"Operational innovations at restaurants like Taco Bell rival those at any factory in the world. A view from the drive-thru window at how they do it"
|
| Hedging Bankers Skirt Efforts to Overhaul Pay |
| 02/07/11 | | Management |
"Intent on fixing a banking system that contributed heavily to the recent financial crisis, lawmakers and regulators pushed Wall Street to overhaul its pay practices. Big banks responded by shifting more compensation into stock, a move intended to align employees' interests more closely with those of investors and discourage excessive risk-taking. But it turns out that executives have a way to get around those best-laid plans. Using complex investment transactions, they can limit the downside on their holdings, or even profit, as other shareholders are suffering."
|
| The president as micromanager |
| 01/26/11 | | Management |
"While watching the speech, I tweeted that 'Obama sounds remarkably similar to the CEOs I used to listen to on earnings calls: the ones with mediocre EPS and a failing business model.' This wasn't a crack at Obama, or Democrats it was a reaction to the content. And after watching the responses, the impression lingers--indeed, maybe it's strengthened. The nation is facing some really difficult problems, particularly on the fiscal front. There's no longer any way to put it off pretty soon, the government is going to have to start making some very hard choices about taxes and spending. No matter what it chooses, that probably means lower economic growth, angry voters, and some real loss on the part of whoever's ox is gored."
|
| The downfall |
| 01/02/11 | | Management |
"Next time you go to an AGM, if you think there is cause for concern, ask the CEO during the QandA if management could leave the room for 15 minutes because you have a few questions to ask the independent directors concerning executive compensation, and point out that it would not be appropriate for management to be present for such a discussion. Don't be afraid. The meeting is for you, the shareholder. If the CEO gets defensive, that might be taken as a bad sign. If the independent directors get defensive, that could be taken as a really bad sign, because it would suggest that, in their hearts, they don't represent shareholders at all."
|
| The Perfect Stimulus: Bad Management |
| 11/06/10 | | Management |
"One day, a position opened above me, and I was the most obvious candidate to fill it. My boss called me into her office and said she had some bad news. She explained that the media was giving our company a lot of heat because almost all of our managers and executives were white males. Promoting me, she explained, would only make things worse. I asked how long I might need to wait for all of this to blow over. My boss was vague, but she said the timeline involved smoothing out the effects of two centuries of corporate discrimination."
|
| Mott's strike |
| 08/22/10 | | Management |
"After nearly 90 days of picketing in the broiling sun outside the sprawling Mott's apple juice plant here in upstate New York, Michelle Muoio recognizes that the lengthy strike is about far more than whether the 305 hourly workers at the plant get a fatter or slimmer paycheck."
|
| On business competition |
| 07/10/10 | | Management |
"'A funny thing happens when you begin to capture competitive differences on paper', says Harvard Professor Youngme Moon in her book Different, 'there is a natural inclination for folks in the competitive set to focus on eliminating differences rather than accentuating them.'"
|
| Why Amish businesses don't fail |
| 06/21/10 | | Management |
"Want to find America's most successful entrepreneurs? Skip Silicon Valley and Manhattan; head to the rural Amish enclaves. Amish businesses have an eye-popping 95% success rate at staying open at least five years, according to author Erik Wesner's new book, Success Made Simple: An Inside Look at Why Amish Businesses Thrive."
|
| What motivates us |
| 06/01/10 | | Management |
"This lively RSA Animate, adapted from Dan Pink's talk at the RSA, illustrates the hidden truths behind what really motivates us at home and in the workplace."
|
| How much should we pay executives? |
| 06/01/10 | | Management |
"Our results led us to conclude that financial rewards are often a two-edged sword. They motivate people to work well, but when these financial rewards get very large they can be- come counterproductive and actually hurt performance. If our tests mimic the real world, then higher bonuses may not only cost employers more, but also hinder executives in working to the best of their abilities."
|
| Silencing the whistleblowers |
| 05/11/10 | | Management |
"Amid the frenzy of the nation's mortgage boom, the back-of-the-hand treatment that Parmer describes wasn't out of the ordinary. Parmer was one of a small band of in-house gumshoes at various financial institutions who uncovered evidence of corruption in the mortgage business - including made-up addresses, pyramid schemes, and organized criminal rings - and tried to warn their employers that this wave of fraud threatened consumers as well as the stability of the financial system. Instead of heeding their warnings, they say, company officials ignored them, harassed them, demoted them, or fired them."
|
| The story BCG offered me $16,000 not to tell |
| 04/15/10 | | Management |
"I got the feeling that our clients were simply trying to mimic successful businesses, and that as consultants, our earnings came from having the luck of being included in an elaborate cargo-cult ritual."
|
| The sweetest usurious bastards |
| 01/24/10 | | Management |
"But it was the nature of the people I met that most stuck in memory. This was a business where if Jesus was alive he would pull down the Temple over them. It was precisely the sort of business the bible rails against. It offended my decency. But the people were lovely. I met management and a store owner - and - frankly they seemed exactly the sort of people you would like to have Friday drinks with. I liked them. This alarmed me of course - because I expected them to be scum. And maybe they are - but I couldn't tell. They were the sweetest usurious bastards (notwithstanding allegations in consumer complaints about the company)."
|
| Food fighter |
| 01/06/10 | | Management |
"The right-wing hippie is a rare bird, and it's fair to say that most of Whole Foods' shoppers have trouble conceiving of it. They tend to be of a different stripe, politically and philosophically, and they were either oblivious or dimly aware of Mackey's views, until the moment, this summer, when Mackey published an op-ed piece in the Wall Street Journal asserting that the government should not be in the business of providing health care. This was hardly a radical view, and yet in the gathering heat of the health-care debate the op-ed, virally distributed via the left-leaning blogs, raised a fury."
|
| Just glide to the next boardroom |
| 12/29/09 | | Management |
"Directors who were supposedly minding the store as disaster struck at companies like Countrywide Financial, Washington Mutual or Fannie Mae have not all been banished from other boardrooms. In many cases, directors just seem to skate away from company woes that occurred on their watch."
|
| Golden pay for CEOs sinks stocks |
| 12/27/09 | | Management |
"Finance professor Raghavendra Rau of Purdue University and two colleagues looked at CEO pay and stock returns for roughly 1,500 companies per year from 1994 through 2006. They found that the 10% of firms with the highest-paid CEOs produce stock returns that lag their industry peers by more than 12 percentage points, cumulatively, over the next five years. Companies at the top of the pay pile, Prof. Rau concluded, award their CEOs an annual average of $23 million - but leave their shareholders poorer (relative to other companies in the same industry) by an average of $2.4 billion per year. Each dollar that goes into the CEO's pocket takes $100 out of shareholders' pockets."
|
| Upper mismanagement |
| 12/20/09 | | Management |
"One of the themes that came up while I was profiling White House manufacturing czar Ron Bloom earlier this fall was managerial talent. A lot of people talk about reviving the domestic manufacturing sector, which has shed almost one-third of its manpower over the last eight years. But some of the people I spoke to asked a slightly different question: Even if you could reclaim a chunk of those blue-collar jobs, would you have the managers you need to supervise them? It's not obvious that you would."
|
| From the 'do a little evil' file |
| 12/20/09 | | Management |
"Thanks to an extremely fortuitously timed stock-option repricing (exchange), Googlers have made a killing in the past eight months at shareholder expense."
|
| Sardar Biglari's 2009 letter |
| 12/15/09 | | Management |
"Because metrics are proxies for performance, managing by a single metric causes the tail to wag the dog. Using just one metric is akin to taking a picture of a two-ton elephant: No single angle can capture the 'big picture.' Analysts who evaluate same-store sales trends almost to the exclusion of other metrics, and the CEOs - who either primarily weigh that one piece of data or (shudder) listen to the pundits - do their best to deliver on that one statistic, but usually cost their shareholders dearly."
|
| Not so fast |
| 10/09/09 | | Management |
"He is the 'Father of Scientific Management' (it says so on his tombstone), and, by any rational calculation, the grandfather of management consulting. Whether he was also a shameless fraud is a matter of some debate, but not, it must be said, much: it's difficult to stage a debate when the preponderance of evidence falls to one side."
|
| Ego and the CEO |
| 08/27/09 | | Management |
"Which is the biggest red flag for a potential accounting fraud: Bad corporate governance, an overinflated share price or too many stock options? None of the above, according to a new study by researchers from three Canadian universities. They argue that the biggest risk factor for fraud is a CEO with a truly oversized ego."
|
| Are management consultants necessary? |
| 08/24/09 | | Management |
"Most people in the business world know there's a lot of phony expertise floating around. Most of it you can explain on anthropological rather than technical grounds: we have a very complex economy that requires management, and management needs legitimacy. It does this through credentials and so-called expertise, and creates a whole class of people who are accountable only to themselves. For me the problem is the idea there's a general field of management that applies across all different kinds of businesses. That's what I think is all baloney."
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| The origins of the corporate boards |
| 06/30/09 | | Management |
"Prompted by the litany of complaints about corporate boards - as once again highlighted by recent corporate scandals - this paper seeks to add to the literature on why corporation laws in the United States (and, indeed, around the world) generally call for corporate governance by or under a board of directors. Moreover, this paper takes a very different approach in searching for an answer. Instead of theorizing, this paper examines historical sources in order to look at how and why an elected board of directors came to be the accepted mode of corporate governance. This will entail a reverse chronological tour all the way back to the antecedents of today's corporate board in fourteenth through sixteenth century companies of English merchants engaged in foreign trade. The central insight of this chronology is that the corporate board of directors did not develop as an institution to manage the business corporation. Rather, it is an institution the business corporation inherited when the business corporation evolved out of societies of independent merchants. This paper also shows how these merchant societies based their adoption of the antecedents of today's corporate board on widespread political theories and practices in medieval Europe that, although hardly democratic, often called for the use of collective governance by a body of representatives. The discovery of the historical and political origins of the corporate board, besides being interesting in its own right, suggests that the current frustration with corporate boards may arise from confusing an institution designed to achieve political legitimacy through consent of the governed, with the goal of assuring efficient management of a business on behalf of passive investors." [via prefblog.com]
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| How self-made titans launched |
| 06/18/09 | | Management |
"Yet for entrepreneurs who have truly creative ideas, unrelenting devotion and oodles of ability to execute--but who may not have fat trust funds to lean on--there's reason for hope. Scan the Forbes list of the world's wealthiest people and you'll find moguls from startlingly humble origins."
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| The irrational pursuit of growth |
| 06/16/09 | | Management |
"Why are so few companies opposed to sucking cash out of a business and returning it rather than reinvesting it at sub-par rates of return?"
|
| How David beats Goliath |
| 05/04/09 | | Management |
"David's victory over Goliath, in the Biblical account, is held to be an anomaly. It was not. Davids win all the time. The political scientist Ivan Arreguin-Toft recently looked at every war fought in the past two hundred years between strong and weak combatants. The Goliaths, he found, won in 71.5 per cent of the cases. That is a remarkable fact. Arreguin-Toft was analyzing conflicts in which one side was at least ten times as powerful - in terms of armed might and population - as its opponent, and even in those lopsided contests the underdog won almost a third of the time."
|
| CEO leverage vs corporate leverage |
| 05/04/09 | | Management |
"We find that firms behave remarkably similarly to how their CEOs behave personally when it comes to debt financing and leverage. We compile a comprehensive sample of home purchases and financings among S&P 1,500 CEOs. Debt financing in a CEO's recent home purchase is used as a revealed preference of the CEO's innate personal tolerance for leverage. We find a strong and robust positive relation between personal and corporate leverage. A one standard deviation (34 percentage points) increase in CEO personal leverage is found to be associated with 20 percent higher corporate leverage for the median large public U.S. firm. This relation is found to be significantly stronger for firms with weaker governance, suggesting that sorting and endogenous matching of CEOs and firms does not entirely explain our evidence. Our results have implications for our understanding of corporate capital structure decisions and suggest more generally that an analysis of CEOs' personalities and personal traits can convey important information about the financial policies of the firms they manage."
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| The management myth |
| 05/01/09 | | Management |
"The thing that makes modern management theory so painful to read isn't usually the dearth of reliable empirical data. It's that maddening papal infallibility. Oh sure, there are a few pearls of insight, and one or two stories about hero-CEOs that can hook you like bad popcorn. But the rest is just inane."
|
| Success on the side |
| 04/24/09 | | Management |
"In the early days, Paul Buchheit, employee number 23 at Google, was focused on Web search like most other engineers. But like many other restless, smart workers, Buchheit also enjoyed hacking away at random stuff during his free time. What makes Buchheit different is that his Friday afternoon time was unusually productive: He conceived the initial prototypes for Gmail, the popular email program now used by millions of people, and AdSense, which is responsible for most of the company.s billions. AdSense is the technology that displays relevant ads on the right-hand side of the search results page."
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| Hanging tough |
| 04/13/09 | | Management |
"One way to read these studies is simply that recessions make the strong stronger and the weak weaker, since the strong can afford to keep investing while the weak have to devote all their energies to staying afloat. But although deep pockets help in a downturn, recessions nonetheless create more opportunity for challengers, not less. When everyone is advertising, for instance, it.s hard to separate yourself from the pack; when ads are scarcer, the returns on investment seem to rise. That may be why during the 1990-91 recession, according to a Bain & Company study, twice as many companies leaped from the bottom of their industries to the top as did so in the years before and after."
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| Yes, you can raise prices |
| 03/04/09 | | Management |
"The signs in the window of Jay Kos, an upscale men's wear boutique on Park Avenue in Manhattan, seemed at best cheeky, at worst clueless. Surrounded by glaring economic-crisis headlines cut out of newspapers, they said, "Cashmere sweater: $2,500. Recession price: $2,500." "Lamb's fleece jacket: $11,000. Recession price: $11,000." It was an in-your-face declaration that the business, whose clients include bankers and celebrities, wasn't going to cave in to any mere economic collapse. "Some people hated it," says the shop's eponymous owner. "But most people loved it. And some people even bought because of it." That story is worth pondering because one of the most important decisions businesses must make in this recession is what to do about prices."
|
| The start of 10 Fortune 500 firms |
| 03/02/09 | | Management |
"The following examples are businesses which have grown so large to be included in the Fortune 500, or the world's largest 500 companies - but which have started from the humblest beginnings. They are 'Rags to Riches' stories of unique brands, started by unique individuals that only have accumulated wealth and vast market share, but have created their own niche and never looked back."
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| Stumbling on entitlement |
| 02/05/09 | | Management |
"For the American public, Daschle became the latest symbol of everything that is wrong with Washington -- the influence-peddling and corner-cutting and sacrifice of the public good to private interest. Now that this system has let them down, and left them poorer and anxious about the future, people are angry about it and no longer willing to accept the corruption of the public process and the whole notion of public service."
|
| Labor pains are not easily shared |
| 01/02/09 | | Management |
"One way to accomplish such a "share economy," Weitzman argued, would be to change the structure of compensation so that a higher percentage of it was in the form of a bonus based on company revenues and profits, with a lower base pay. That would allow firms to reduce payroll costs during a recession without having to resort to big layoffs. It would also help ensure that workers shared in the boom times as well."
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| Will work for praise |
| 12/30/08 | | Management |
"Beyond brand-hungry strivers, masses of free laborers continue to toil without ever seeing a payday, or even angling for one. Many find compensation in currencies that predate the market economy. These include winning praise from peers, earning an exalted place within a community, scoring thrills from winning, and finding satisfaction in helping others."
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| How sticky are wages? |
| 12/19/08 | | Management |
"There's been a huge shift in power in recent years from labor to capital: corporate profits have been rising much faster than wages for some time now. It makes sense that capital would make use of its newfound power to reduce labor costs in a deflationary environment of rising unemployment. During the boom, companies laid off workers because those workers demanded, and cost, too much money. Now that workers have lost their negotiating leverage, we might start seeing more across-the-board pay cuts."
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| The other half of "artists ship" |
| 12/01/08 | | Management |
"As companies grow they invariably get more such checks, either in response to disasters they've suffered, or (probably more often) by hiring people from bigger companies who bring with them customs for protecting against new types of disasters. It's natural for organizations to learn from mistakes. The problem is, people who propose new checks almost never consider that the check itself has a cost."
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| Fuld solicited Buffett offer |
| 11/10/08 | | Management |
"Fuld's failure to save Lehman, after rescuing it three times before, is a story about how the most indomitable man on Wall Street became addicted to leverage and intoxicated with the power it brought. It is a tale about the inability to repair a financial model wrecked by a lack of limits and transparency, a story pieced together from interviews with former Lehman executives and outsiders familiar with the firm. Isolated, surrounded by acolytes and unaware of the rivalries tearing his firm apart, Fuld was too prideful to accept the fast-eroding value of the empire he had built, too slow to cut a deal."
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| Retailers reprogram workers |
| 09/10/08 | | Management |
| From good to great ... to below average |
| 07/31/08 | | Management |
| Superstar CEOs |
| 07/03/08 | | Management |
| Corporate democracy is a myth |
| 06/20/08 | | Management |
| Companies promise CEOs lavish posthumous paydays |
| 06/10/08 | | Management |
| All together now? |
| 06/02/08 | | Management |
| Rewarding failure |
| 05/05/08 | | Management |
| Outdoing the Swiss Army knife |
| 07/25/07 | | Management |
| A virtuous cycle |
| 07/01/07 | | Management |
| Smothered by six sigma? |
| 06/04/07 | | Management |
| Insurance legend still packs a punch |
| 02/04/07 | | Management |
| Who's afraid of the big bad boss? |
| 01/02/07 | | Management |
| Smashing the clock |
| 12/14/06 | | Management |
| Insiders with a curious edge |
| 12/07/06 | | Management |
| Sleazy CEOs have even more options tricks |
| 11/14/06 | | Management |
| More sneaky options schemes |
| 10/17/06 | | Management |
| When shareholders aren't valued |
| 08/28/06 | | Management |
| Who signed off on those options? |
| 08/27/06 | | Management |
| CEO bought a yacht? |
| 08/15/06 | | Management |
| Tech CEO pay doesn't match performance |
| 07/19/06 | | Management |
| Cheaper stock options |
| 07/13/06 | | Management |
| More than 100 firms probably backdated options |
| 07/12/06 | | Management |
| Tearing up the Jack Welch playbook |
| 07/11/06 | | Management |
| Options gone wild! |
| 07/01/06 | | Management |
| Apple's irregular options |
| 06/29/06 | | Management |
| CEO Paycheck: $42,000 a day |
| 06/21/06 | | Management |
| A study in CEO greed |
| 06/07/06 | | Management |
| The next big scandal |
| 05/26/06 | | Management |
| Pay for failure should stick in investors' craws |
| 05/10/06 | | Management |
| Spinning CEO pay |
| 04/21/06 | | Management |
| Do company founders make better CEOs? |
| 04/11/06 | | Management |
| Ikea boss proud to be stingy |
| 03/26/06 | | Management |
| When the blind see better |
| 02/27/06 | | Management |
| A pink slip in your stocking? |
| 12/19/05 | | Management |
| Advertising: on the mat |
| 11/25/05 | | Management |
| Too many turkeys |
| 11/25/05 | | Management |
| Top 25 Boards In Canada |
| 08/25/05 | | Management |
| The 5 most outrageously overpaid CEOs |
| 08/24/05 | | Management |
| Is your boss a psychopath? |
| 08/19/05 | | Management |
| Obliquity |
| 04/13/05 | | Management |
| Test of good corporate citizenship |
| 02/19/05 | | Management |
| CEOs and their Indian rope trick |
| 12/12/04 | | Management |
| Corporate culture still self-serving |
| 12/12/04 | | Management |
| Passing the baton |
| 10/16/04 | | Management |
| Corporate governance by the numbers doesn't work |
| 09/08/04 | | Management |
| Always on the job, employees pay with health |
| 09/05/04 | | Management |
| Voting 'No' on shareholder democracy |
| 08/22/04 | | Management |
| Governing in the goldfish bowl |
| 08/12/04 | | Management |
| From gluttony to class warfare |
| 08/08/04 | | Management |
| Sensible reforms resisted |
| 07/05/04 | | Management |
| Link found between candor, share prices |
| 06/15/04 | | Management |
| AT&T Wireless self-destructs |
| 04/17/04 | | Management |
| CEO pay up again |
| 04/07/04 | | Management |
| Altering of worker time cards |
| 04/04/04 | | Management |
| Coalition of the greedy |
| 04/03/04 | | Management |
| Running out of options |
| 03/18/04 | | Management |
| Mis-Guided |
| 02/12/04 | | Management |
| Who's minding the store? |
| 02/09/04 | | Management |
| Two-faced capitalism |
| 01/25/04 | | Management |
| Is your boss a crook? |
| 01/15/04 | | Management |
| Pension peril looming |
| 01/11/04 | | Management |
| German companies cutting pension plans |
| 01/07/04 | | Management |
| Make more mistakes |
| 12/27/03 | | Management |
| Humbled |
| 12/18/03 | | Management |
| The King Lear syndrome |
| 12/15/03 | | Management |
| I quit! |
| 11/11/03 | | Management |
| Where's the stick? |
| 10/09/03 | | Management |
| Health costs skyrocket |
| 09/09/03 | | Management |
| The hidden costs of offshore outsourcing |
| 09/03/03 | | Management |
| Is your boss an idiot? |
| 08/31/03 | | Management |
| Chasing the dream |
| 08/11/03 | | Management |
| Lehman cash woes |
| 07/22/03 | | Management |
| We're (still) in the money |
| 04/20/03 | | Management |
| Firms pay taxes on fraudulent earnings |
| 04/05/03 | | Management |
| Good riddance to guidance? |
| 01/29/03 | | Management |
| Conseco collapse deals new blow to CEO cult |
| 12/18/02 | | Management |
| Year of the scandal |
| 12/18/02 | | Management |
| The holiday bonus bait and switch |
| 12/06/02 | | Management |
| Where did everyone go? |
| 11/15/02 | | Management |
| The case against professionalism |
| 10/25/02 | | Management |
| Insider Loans |
| 10/20/02 | | Management |
| The mystery of the blood red ledger |
| 09/13/02 | | Management |
| The talent myth |
| 09/12/02 | | Management |
| Corporate directors see risks climbing |
| 08/11/02 | | Management |
| Fraud Inc |
| 07/25/02 | | Management |
| Men, women don't manage differently |
| 05/27/02 | | Management |
| Options' costs revealed |
| 05/20/02 | | Management |
| CEO's: fallen idols |
| 05/05/02 | | Management |
| Companies whose boards need a scare |
| 04/03/02 | | Management |
