Sunday, January 27, 2008

If failure on Wall Street is simply bad luck, then is success only good luck?

Today's New York Times carries a story about Top Wall Street executives who have lost $ Billions becoming hot properties once they have been fired, sometimes being offered even better positions than those they lost. While middle ranking managers get fired and have problems being re-hired, top executives are assumed to have merely been unlucky. It seems that Wall Street sees them as smart simply because they have been in proximity to so much money.

It is rather surprising that failure on an enormous scale is seen as the result of bad luck, whereas success is never ascribed to good luck, but to skill and intelligence. History tells us that this is more so today than at any time in history.

Wednesday, January 23, 2008

The economy - wild guesswork?

While it is well known that economics is inexact, it is surprising to me that leaders - of companies and countries - put enough faith in it to make "bet your life" decisions on the basis of recommendations by a few economists. Sadly, the life they bet is not their own, but that of employees and citizens. Usually, they stretch as far as they can, and then, when there is trouble, they try to correct. Any engineer will tell you that a common problem with control devices is that of over-correction. Economies and businesses may be too large for any one person, or even small coterie to manage.

Since we are usually wrong about economic prediction, and correct too late, this is as bad as over-correction. Perhaps you have to be old and lived through multiple cycles to put everything in perspective.

Tuesday, January 22, 2008

Processes for good execution are more important than much expert knowledge

Strategy must be easy. After all if someone with an MBA and 5 years experience can devise a strategy for a large company, how can it be that hard. However, failure is usually the result of poor execution, monitoring, correction, and ability to learn from success and failure. Yet, so many senior executives move on after they have become comfortable with the strategy and spend little time on execution. The grizzled veterans who are so good at execution are forced into early retirement. There is little institutional memory from which middle and junior managers can learn. Business schools spend far less time on execution than on strategy. It is left to Engineering and Vocational schools to teach the tools of execution.

This is why, while over the past fifty years more and more management education has taken place, we do not see the performance of most companies in the long-term to be better than they were fifty years ago. They do not execute well and do not learn from their successes and failures.

Saturday, January 12, 2008

National Identification Cards are on their Way

As we see more and more pressure for action against illegal immigrants, we are headed towards a national identity card for everyone. Since we will not be able to make illegal immigrants carry identification showing that they are illegal, we can only make citizens and legal residents carry I.D.
Therefore as the demand for more controls on illegal immigrants and terrorists grows, the inevitable requirement is that everyone, of all ages, will have to carry ID. After all, if we make it everyone over 16, how do we know that a young person without ID really is only 15!

Friday, January 04, 2008

Networking Groups can be extremely valuable

Over the past few years the idea of Networking has taken off. However, it has changed from a process of people making friends and helping each other into a more aggressive, "what's in it for me" approach. As a result, one of the few places where people can meet others in a safer environment is a Networking Group. Organizations such as the Marketing Executives Networking Group foster an environment where members are under a moral obligation to "pass it on." As a result for most people, joining a networking group is a very productive solution.
We may wish for the good old days, but as new technology speeds up the world, it makes sense to adapt.

Thursday, January 03, 2008

Do we over-emphasize strategy and ignore execution?

There is so much emphasis on strategy in business today. Often it is flawed. Sometimes this is because it is based in incorrect or incomplete knowledge, sometimes because it is based on faulty logic. Yet, most of the business failures may be rooted in inadequate execution of strategy rather than the strategy itself. This applies whether the strategy is for new products, acquisition, expansion to new geography or re-alignment of product markets.
Business schools find it difficult to teach execution. Most corporations do not train managers in it effectively. Yet, there are principles of execution which can be learned. However, they are best learned by a combination of experience and process.

Tuesday, January 01, 2008

So much hope for the new year - 2008! A mark of humanity?

At the start of each new year, we all have so much hope. Perhaps this is because we have been so disappointed in the old one. But almost all humans look forward to what the new year will bring. We make New Year resolutions, expect completely different experiences, and have a party to celebrate the new year. This is a mark of humanity. We are optimists. We hope and even expect change and improvement.