Archive for the ‘Business’ Category

Just DO

May 16, 2014

Sponge Bob

Ok, I resubscribed to the Harvard Business Review in hopes of finding something of value for my entrepreneur son. First issue to arrive was April 2014* and a quick look at the table of contents led me to page 30 and the “Idea Watch – Defend Your Research” section with: “The Challenge – Does touching men’s underwear really make women more likely to indulge in risky, reward-seeking behavior?” The title of the article gave away the findings of this important research: “Women Too Respond to Sexual Cues by Taking More Risks”.

Hmm. Interesting. Oh ya, I remembered an MTV interview with candidate Bill Clinton during which he was asked “Boxers or Briefs?” by a cute young woman and we all know how that ended. Further recollection brought to mind the series of events that led (eventually) to the birth of all three of our children and indeed tactility and boxers had been involved! I’d long wondered what could induce a young woman in the throes of youthful exuberance to risk all for reward of unknowable dimension. It all suddenly seemed so obvious.

Unfortunately though, a complication inflected these cerebrations at the very next visit to my reading room and what else but the Economist**. Recent experiments have conclusively shown that some lab animals are so scared of men (and not women!) that pain producing nerve cells shut down. “Simply put, the animals were being scared painless. A significant increase in faecal pellets suggested they were scared shitless as well.” And, relative to the above, the mere presence of an article of men’s clothing is enough to induce the phenomena.

Hmm. Go figure. That doesn’t seem conducive to you know what. I guess it must have been my good looks and scintillating personality way back when. But maybe I’m over thinking this whole thing. Recently, while reading of correspondence between artists Eva Hesse and Sol Lewitt, it occurred to me that once again I should meditate or take a run or something other than cogitate.   Hesse was agonizing about aspects of her life and work to which friend Lewitt advised: “Just stop thinking, worrying, looking over your shoulder wondering, doubting, fearing, hurting, hoping for some easy way out, struggling, grasping, confusing, itching, scratching, mumbling, bumbling, grumbling, humbling, stumbling, numbling, rumbing, gambling, tumbling, scumbling, scrambling, hitching, hatching, bitching, moaning, groaning… Stop it and just DO!***

*No foolin’: HBR April 2014 P 30
**Economist May 3-9, 2014 Sex, writhes and videotape
***WSJ 4 23 14 “Converging Lines: Eva Hesse and Sol LeWitt
Note: Lewitt’s “just DO! was written fifteen years before Nike took as its slogan a convict’s entreaty to his own firing squad cf April 6, 2012 below


Take Heart!

April 9, 2010


  A “Notice of Annual Meeting Of Shareholders” aka proxy statement, is the bland accompaniment to large public corporations’ glossy annual reports.  Especially when economic tides rise high, the latter are filled with impressive graphs and color photos of beaming faces in far flung places.  The former are little more than ink on paper whatever the water level.

  The proxy statements carry much arcanity along with an aspect of a company’s operations under growing scrutiny – compensation.  With the nation’s unemployment well beyond 10%, bailouts, etc, it is interesting to read how pay packages in the millions and tens of millions are assembled.

  Take a big bank.  Out of the 100+ pages of one March 2010 proxy, nearly forty pages are devoted to graphs and articulation in intricate rationalization.  (The next largest section goes all the way to seven pages.)  We hear about the need for sustained leadership, peer data review, retention performance share awards, and of course TARP.

  Furthermore, generally speaking, salary plays a relatively small roll in these arrangements.  Bonuses are where the dessert is and it’s assembled from an assortment of goodies like stock and options to buy stock at a certain price.  Thus, the price of a share of a company’s stock is the determining factor in the generation of wealth for many CEOs.

  The problem is that share price performance is not necessarily directly related with the underlying trajectory of a business.  Short term actions do not necessarily accrue to long term benefit.  Conversely, in a difficult environment, a manager might execute brilliantly yet yield meager profit.

  Enter (who else) Warren Buffet.  The compensation part of the 2010 Berkshire Hathaway proxy covers but one of its eleven pages.  Buffet’s personal wealth has of course grown – but not at the expense of his shareholders.  He pays himself less than $200,000/yr.  But what is really interesting is his method for developing pay packages for his key people.

  “The Committee has established a policy that: neither the profitability nor the market value of its stock are to be considered. Factors considered … are typically subjective… he utilizes many different incentive arrangements with their terms dependent upon economic potential or capital intensity.  These prices are never related to measures over which [the person] has no control.”

  His well known results speak for themselves.  The overall gain of his company from the date of inception is 434,057% compared with the most familiar yardstick – the S&P 500 at 5,430%.  And what I’m sure he’d say was nearly as important in the evolution of his business has been the development of an incredibly strong and defensible position. 

  As he likes to say “you don’t know who is wearing swimming trunks until the tide goes out…”  Indeed, instead of being bailed out, he was in there with Uncle Sam tossing lifelines.  And taking advantage of the extremely depressed pricing of most financial instruments.  “I felt like an oversexed guy with a harem.”

   How did he get to be so smart?  He’d be the first to admit to being fortunate in having had both his brain wired up in a certain fashion as well as the unconditional love of his parents.  There was additional insight in the March 24, 2010 WSJ. 

  Buffet dearly wanted to matriculate at Harvard, but was denied admission.  “The truth is, everything that has happened in my life … that I thought was a crushing event at the time, has turned out for the better… [setbacks] carry you along.  You learn that a temporary defeat is not a permanent one.  In the end, it can be an opportunity.”*

  Take heart kids.

*WSJ 3/24/10

“There is nothing so useless as doing efficiently that which should not be done at all.”*

November 20, 2009


    At least two august publications, the Economist and Harvard Business Review, chose to prominently mark the centennial celebration (yesterday, November 19) of the birth of Peter Drucker.  HBR asks on its November cover, ”What Would Peter Do? How his wisdom can help you navigate turbulent times.” The Economist says that “Four years after his death Peter Drucker remains the foremost management guru”.

  Author of dozens of books and hundreds of articles, he engaged me first in 1980 with his Managing in Turbulent Times just as the farm belt entered a difficult decade.  He advised: “A time of turbulence is a dangerous time, but its greatest danger is a temptation to deny reality.”  I was green, didn’t get it right off and the glue of our business model slowly dissolved.  But for a friendly banker we might have gone under.  Finally a light went on, I reread, and have been a fan ever since.

  Drucker was born in Vienna, moved to London in 1933 after falling into disfavor with the incipient fascist movement and moved to the US in 1933.  In 1939 he published his first bestseller, The End of Economic Man, in which he held that there was more to being a boss than worrying about the cost of payroll.

  Through the ensuing years, he was always out front.  “Management by objectives” and “knowledge worker” were his.  He foresaw the postwar rise of Japan and the tremendous importance of marketing.  He warned about public perception of oversized management compensation – in the mid eighties.  He famously said that the major consideration is not to figure out what to do, but “what to stop doing”.  Drucker devoted a significant part of his career to nonprofits which he thought formed a crucial part of a dynamic society.

  His take was always holistic and it will forever be fascinating to read him connecting disparate dots.  His preternatural perspicacity had to have been related to his interest in art.  During his forty year tenure at Claremont College he gave courses in both management and Japanese painting.

  An interviewer once took note of a “few black smudges on a yellow piece of paper” on a wall in his study.  Drucker said “I bet you don’t see much in that”.  Nope.  He then said that a Zen contemplative could offer the essential nature of a tree or whole landscape with a few quick strokes of a brush.  Forest gets lost in the trees all too often.

  Drucker was also an avid mountaineer.  He once said that: “I have always been a loner… I work best outside.  That’s where I’m most effective.  I would be a very poor manager.  Hopeless.”  Uh, yep, yep, and yep.

  Reminds me of Butch Cassidy and the Sundance Kid.  When they’re in the mountains of Bolivia looking for work, the Strother Martin character asks the Kid to shoot a few blocks of wood he tossed out so as to test Kid’s skill set.  Kid misses – to Martin’s disgust.  Kid asks “Can I move?”  Martin says “huh?”  Kid rolls into action with Smith and Wesson shock, awe, and accuracy.

  ‘Scuse me while I step outside.

*If you don’t feel like reading any of his books, search for quotes and you’ll find something that resonates:

– “Management is doing things right.  Leadership is doing the right things.”

– “The best way to predict the future is to create it.”

– “Follow effective action with quiet reflection.  From the quiet reflection will come even more effective action.”

– “People who take risks generally make about two big mistakes every year.  People who don’t take risks generally make about two big mistakes every year.”

– “So much of what we call management consists of making it difficult for people to work.

– “The computer is a moron.”

Grace Under Pressure

January 16, 2009

 Once heard Lorne Michaels, the producer of Saturday Night Live being interviewed.  Questioned about what made for the best guest hosts he responded “athletes” without missing a beat.  He said that people like Michael Jordan were used to being in front of a demanding audience and performing under pressure.

  He didn’t mention the tremendous work ethic that great athletes must also have.  Or the ability to take mistakes in stride or worse – how to deal with “the agony of defeat”.

  Youngest daughter played D1 soccer for four seasons.  Team made it to the Big 10 championships her last season.  Lost by one point to the eventual #1.  They worked out from 7:00 AM to 10:00 AM and several hours late in the PM six days a week.  And that was the off season.  Seniors all graduated with honors.

  She’s now in Aspen working at an exclusive club.  Waitress/sommelier.  Her first time in Colorado was during the summer before she was born.  I remember being concerned for her prenatal wellbeing when we all hiked above the upper lift at Aspen Highlands.  +12,000 ft.  I worried that the thin air might somehow attenuate her potential to, well, smile.

  Needn’t have worried.  On her Facebook wall her brother’s post read: “Why is it that in every picture you look like you are having more fun than everyone else in the room?”  In Sydney, Australia she and a friend won the grand prize at a karaoke contest singing “Born in the USA” along with the Boss.  Who else could get away with something like that?  In June of 2008?  Her name comes from a Hebrew word meaning “source of joy” so maybe that’s it.

  Lorne Michaels’ thoughts came to mind when we heard that senior staff at the club were favorably impressed with her performance.  Maneuvering trays and bottles through a room crowded with demanding folks has to be easier than doing the same with a ball through a bunch of Amazons intent upon inflicting bodily harm.

  These months have been a great opportunity for her to sift through her thoughts of the year she spent working at a fine winery in New Zealand.  She’s just now begun evaluating graduate programs in viticulture and oenology.  I was quite taken by her response to my question of what drew her interest thereto.

  She said “Dad, you can’t cheat or lie.  You can only do the best you can do with the soil and the grapes.  The fact that a crucial ingredient, the weather, is completely beyond the vintner’s control only makes the work more interesting”.

  Her first comment evoked a vision of the current scoundrels of Wall Street.  I thought about how all of the ugly headlines must reverberate across the cerebrations of those with career choices not yet hardwired in.

  Then it dawned on me that she was talking about farming and how, in any of its permutations, agriculture is the archetype for an honest living.  For exactly the reasons she mentioned. 

  A few years ago some urbanite asked Pulitzer Prize winning poet Jorie Graham why she lived in Iowa:

  “Iowans respect work.  When one comes to live and work here, from whatever corner of the globe, one realizes after a while that one is working amidst people who work hard, who work with their hands, who stand between land and sky, corn prices and weather, with determination and faith and courage and an uncluttered understanding of the value of work.  When you sit down to work in their midst – you have a deep sense of their being at work in your midst.  Whether it’s the farmland that surrounds us, or the small businesses struggling around us, writers in Iowa are encircled – and instructed – by all kinds of other real work being done… One can feel the rightness of a well-planted thing, the incredible hard work it takes to make it come to fruition, the miracles and the sweat and the patience and the technique – both literal and imaginary – are in fact poems or stories that carry in their marrow the values and the beliefs of that community…” 

  Yup, can take the girl out of Iowa, but can’t take Iowa out of the girl.


The grapes of my body can only become wine
After the winemaker tramples me.
I surrender my spirit like grapes to his trampling
So my inmost heart can blaze and dance with joy.
although the grapes go on weeping blood and sobbing
“I cannot bear any more anguish, and more cruelty”
The trampler stuffs cotton in his ears: “I am not working in ignorance
You can deny me if you want, you have every excuse,
But it is I who am the Master of this Work.
And when through my Passion you reach Perfection
You will never be done praising my name.”


Persian mystic Jelaluddin Rumi  1207-1273

Think Responsibly

December 26, 2008

  Balzac wrote: “Behind every great fortune lies a forgotten crime.”  Combine that thought with Buffet’s “only when the tide goes out do you discover who’s been swimming naked” and you a great take of the current financial landscape.

  And while not quite completely systemic (thanks Mr. Buffet!) corruption and bad practice are, of course, rife.  The headlines have never before been filled with such a torrent of tales of Ponzi schemes, corruption, bribery, self delusion, and disingenuity.  Well maybe not never.  Paul Krugman and others have compared this state of affairs with the collapse of the gilded age.    

  The financial arrangements at the bottom of the housing bubble, while maybe not criminal, were disastrously hair brained.  Daughter traveled for a bit with several bankers from the UK who joked about financing their multi-continent peregrinations by means of liberal applications of their index fingers on the mortgage approval yes button.  Nothing easier to spend or risk than someone else’s money.

  Yet another case of “The Best and The Brightest” syndrome.  Just like intellectual war planning and the development of weapons of mass destruction undertaken by highly educated elites to which I’ve referred several times.  Another permutation of the Enlightenment conundrum.      

  This all brings to mind the last book of the letters of George Santayana that just came out.  His most famous words: “Those who cannot remember the past are condemned to repeat it” are not his only of interest.  “Where parties and governments are bad, as they are in most ages and countries, it makes practically no difference to a community, apart from its local ravages, whether its own army or its enemy’s is victorious in war.”  Will Durant wrote that “Santayana thinks that no people has ever won a war”

  Santayana was a materialist – he thought the universe was mechanistic with humans well understood and explained by behaviorists.  But it was a “buoyant” materialism in the words of Durant.  The life of the mind was important to him.  It is “man’s imitation of divinity”.

  “My atheism, like that of Spinoza, is true piety toward the universe and denies only gods fashioned by men in their own image, to be servants of their human interests”.  “…feeling attracted to the Church, feeling its historic and moral authority, and yet seeing that its doctrine is not true – in its “humility restores man to his only dignity, the courage to live by grace.”*

  I’d be interested in hearing his thoughts now that we know that behaviorists didn’t get it right, that Thoreau’s Walden was richer and made much more sense than BF Skinner’s. How quantum physics and dark matter would inform his thinking.

  I’d enjoyed renewing this old acquaintance over the course of the last few days until I came across this: “Some races are obviously superior to others…”  Jeesh.  He died in 1952 so I’d also like to ask him what he’d thought of the ‘master race’.  He later wrote that: “Wisdom comes by disillusionment” so perhaps that’d be his answer.

  I will conclude with a passage from The Once And Future King by T.H. White with which I often relate: “Long ago I had my Merlyn to help.  He tried to teach me to think.  He knew he would have to leave in the end.  So he forced me to think for myself.  Don’t ever let anybody teach you to think, Lance.  It is the curse of the world.”

  Yup, the ultimate mixed blessing.

*From a review of the book by Robert Richardson in the 12/20 – 21 WSJ

First Do No Harm

October 10, 2008

  Several weeks ago I mentioned something about financier George Soros’ back.  He employed it as sort of an economic indicator.  I’m reading his book The New Paradigm for Financial Markets.  It came out last April.  Wish I’d read it then. Or asked him about his back.  His advice in a memo written in January was to sell US stocks.  The Dow Jones Average is now some 30%/4,000 points less than at the end of that month.

  His purpose in writing the book is to put forth in detail his “theory of reflexivity” underlying his tremendous investment success.  “The theory of reflexivity seeks to illuminate the relationship between thinking and reality.

  “My starting point is that our understanding of the world in which we live is inherently imperfect because we are part of the world we seek to understand”… Understanding a situation and participating in it involves two different functions.  On the one hand people seek to understand the world in which they live.  I call this the cognitive function.  On the other, people seek to make an impact on the world and change it to their advantage. I call this the manipulative function.  When both functions are in operation at the same time they may interfere with each other.”

  Application of his theory in the financial markets leads him to: “the conclusion that both the financial authorities and market participants harbor fundamental misconceptions about the way financial markets function.”  His theory clearly is contrary to prevailing opinion that markets are inherently efficient.    

  Application of his observations to the current political scene is quite provocative in its description of the path that led to the current pickle we’re in.  “The primary purpose of political discourse is to gain power and to stay in power.  Those who fail to recognize this are unlikely to be in power.  The only way in which politicians can be persuaded to pay more respect to reality is by the electorate insisting on it… The electorate needs to be more committed to the pursuit of the truth than it is at present.”

  It’s not just Machiavelli.  The point is that once in power a ‘prince’ might manipulate realty with a certain goal in mind, but end up at the wrong end of the field in disaster.

  The road to hell is paved with good intentions.  An article in the business section of the October 7 online edition of the Economist admonishes: “First do no harm.” And then asks: “Do bosses need their own Hippocratic Oath?”

  Oddly, considerations of the above brought to mind another book recently read: The Architecture of Happiness by Alain de Bolton.  It is a wonderful treatise on the tremendous impact architecture and design have on our existence.  “The places we call beautiful are the work of those rare architects with the humility to interrogate themselves adequately about their desires and the tenacity to translate their fleeting apprehensions of joy into logical plans – a combination that enables them to create environments that satisfy needs we never consciously knew we even had.”

  But the reason consideration of Soros led to M. de Bolton is the latter’s description of how few are needed to effect positive change.  “Lest we begin to despair at the thought of how much might be required to bring about a genuine evolution in taste [and whatever else], we may remind ourselves how modest were the means by which previous aesthetic revolutions were accomplished.”

  Starting with the renaissance and ending with much of the western world’s modern built environment he shows how hugely generative and positive movements have been spawned by just a few tenacious individuals.  “The Italian Renaissance was the work of only about 100 people… It took a mere 200 pages of Le Corbusier’s Towards a New Architecture to decide the appearance of much of the built environment of the twentieth century.”

  He concludes: “We owe it to the fields that our houses will not be the inferiors of the virgin land they have replaced.  We owe it to the worms and the trees that the buildings we cover them with will stand as promises of the highest and most intelligent kinds of happiness.”