sexta-feira, 27 de janeiro de 2012
sábado, 21 de janeiro de 2012
Five Out-of-Date Job-Search Tactics
“Is it still correct to use ‘Dear Sir or Madam’ in a cover letter?” a reader asked in an e-mail.
“That isn’t such a great idea,” I wrote back. “No one uses ‘Dear Sir or Madam’ anymore, unless they’re actually writing to a madam, such as Heidi Fleiss.” I’m not sure my e-mail correspondent caught the joke.
It’s not that using out-of-date job-search approaches brands you as older. Rather, it’s that using no-longer-in-fashion job search techniques marks you as out of touch.
Employers pay us, in part, to be aware of trends and phenomena that affect the workplace. Working people (and job-seekers) should follow the news, keep a bead on our changing world, and stay abreast of changes in business, technology, politics, and cultural shifts. That isn’t an unreasonable expectation. If a job-seeker isn’t curious and perceptive enough to notice that the last time he saw “Dear Sir or Madam” on a letter was around the time Chevy Chase impersonated Gerald Ford falling down the stairs, how will he notice what’s changing in his field?
Here are five formerly useful, now dangerous job-search approaches that hark back to an earlier age. Get them out of your job-search repertoire, pronto.
1. Dedicated Resume Paper and Envelopes. Don’t use nubbly beige or pink or stone-grey resume paper, or any other kind of special paper or matching envelopes, in your job search. Dedicated-use resume paper is a 1980s artifact. Most of your resumes will reach employers electronically, in which case the employer will print it out. For resumes you print on your own, use plain white bond paper. (If you want to use a heavier stock than usual, do it.) Keep resume formatting simple. You don’t need horizontal lines or curlicues, unless you are yourself a creative person, in which case you can go hog-wild with artistic expression. What matters in your resume is its content. You won’t win any points with a resume or cover letter on fancy paper that whispers, “I have a stack of Christopher Cross cassettes in my car.”
2. Creaky Cover Letter Language. When I read “Dear Sir or Madam,” I instantly get a picture of a person wearing white gloves and carrying tiny mother-of-pearl opera glasses in her handbag. Don’t get me wrong—I have opera glasses and I wish white gloves were still in style. They’re not. Never use “Dear Sir or Madam”—or its cousin, “To Whom It May Concern”—in a cover letter for the same reason. In 2012, companies are porous. We can find our hiring manager’s name in two seconds using LinkedIn. We are obliged to try: Correspondence that begins “To Whom It May Concern” means death to a job search. “Dear Hiring Manager” is just as bad. Find the name of the relevant person or lob a resume into the Black Hole and skip the cover letter altogether.
3. Here’s Why You Should Hire Me. People get hired when a hiring manager believes, intellectually and emotionally, that the person sitting in front of him or her can do the job. It isn’t a linear process. That’s not great news to people who believe that power comes from their degrees and certifications because those folks are often more comfortable pushing their skills out in front of them than sitting and talking with a manager in a way that inspires confidence and trust. But tons of job-search books and articles nonetheless encourage job-seekers to grovel and beg, as though any manager has ever been convinced of an applicant’s heft and power by hearing the applicant say: “Please hire me—I’ll do anything you want!”
Groveling doesn’t work, which is why compiling and mailing goofy lists such as “here are 10 reasons you should hire me” are terrible things to do. When we write a post-interview thank-you note or e-mail, we should use it to continue the substantive conversation that started during a job interview, not to mewl and beg for a job. We never, ever want to construct lists of reasons an employer should hire us. We won’t convince anyone of our value that way. If the reasons to hire don’t come through in an interview, you’ve already missed the boat.
Ferrous Resources Chief Executive Officer Litwinski Steps Down
Jan. 19 (Bloomberg) -- Ferrous Resources Ltd. said Chief Executive Officer Mozart Litwinski is stepping down from his responsibilities to pursue “personal business interests,” according to a statement today.
To contact the reporter on this story: Juan Pablo Spinetto in Rio de Janeiro at jspinetto@bloomberg.net
To contact the editor responsible for this story: Amanda Jordan at ajordan11@bloomberg.net
Five Deadly Business Sins
Just how lethal are Peter Drucker’s “five deadly business sins”? You might ask Eastman Kodak, which has committed at least a couple of them and now finds itself on the verge of bankruptcy.
Word emerged last week that Kodak, founded in 1892 and for many decades widely celebrated as one of the world’s greatest companies, may soon file for Chapter 11 protection if it can’t raise enough cash by selling off pieces of its patent portfolio. The news was a sharp reminder of how incredibly challenging it is to sustain any organization, even the most iconic.
How did it come to this? In certain respects, Kodak has been on the defensive since it began facing heightened competition from its arch rival Fuji (8278:JP) some 30 years ago. But fundamentally the company has slipped because it fell prey to two of what Drucker identified in a 1993 essay as a quintet of “avoidable mistakes that will harm the mightiest business.”
The first is a preoccupation with high profit margins. The second: “slaughtering tomorrow’s opportunity on the altar of yesterday.” (The three other deadly business sins, according to Drucker, are “mispricing a new product by charging ‘what the market will bear’; “cost-driven pricing” in which you merely add up your expenses and then stick a profit margin on top—a subject I’ve explored previously; and “feeding problems” while “starving opportunities.”
Few things are as seductive to a business as fat profit margins, and cranking out little yellow boxes of film proved extremely lucrative to Kodak for a long time. For a company in this situation, “the economic returns from the alternatives are simply comparatively unattractive,” Ziggy Switkowski, a former top Kodak executive, explained last week to The Australian.
The problem is that an upstart with a new technology or a disruptive business model will invariably enter the market at the low end and eventually wind up bushwhacking the high-margin manufacturer. Clay Christensen describes this process in his book The Innovator’s Dilemma. Drucker, in his piece, highlighted a similar vulnerability.
The troubles long endured by the U.S. automobile industry were “in large measure … the result of the fixation on profit margin,” Drucker wrote. “By 1970, the Volkswagen Beetle had taken almost 10% of the American market, showing there was U.S. demand for a small and fuel-efficient car. A few years later, after the first ‘oil crisis,’ that market had become large and was growing fast. Yet the U.S. automakers were quite content for many years to leave it to the Japanese, as small-car profit margins appeared to be so much lower than those for big cars. This soon turned out to be a delusion—it usually is.”
Drucker believed that rather than focus on profit margins, a company is better off paying attention to total profit, which is profit margin multiplied by sales volume. It is this figure, he maintained, that helps ensure “optimum market standing.”
Kodak’s other sin—hanging on to the past so vigorously that it ignored the future—has bedeviled many others, as well. Drucker pointed, for instance, to the time that IBM fought back against Apple to gain leadership in the then-fledgling personal computer market. But before long, Drucker recalled, IBM “subordinated this new and growing business to the old cash cow, the mainframe computer.” It was soon left behind.
With Kodak, the “biggest failing was not identifying that the future of the high-margin chemical-imaging business was going to end,” said Switkowski, who worked at the company from 1978 to 1996 and once ran its Australian unit. Kodak’s “strategy was to optimize returns ultimately for a business that would become extinct.”
TIAA-CREF Says Scott Evans to Step Down as Head of Portfolio
(Updates with company comment in fifth paragraph.)
Jan. 19 (Bloomberg) -- TIAA-CREF, the manager of retirement accounts for teachers, said Scott Evans is stepping down as president of the asset-management businesses that had about $441 billion in funds as of Sept. 30.“After 27 years of faithful service, he will leave TIAA- CREF with a deep bench of asset-management leaders in place and a proven strategy,” said Abby Cohen, a spokeswoman for the New York-based firm, in a phone interview today. “Scott will continue to work with us to ensure a smooth transition as we conduct a search for his successor.”The departure of Evans, 52, leaves vacancies in two of the top money-management jobs at the company, which holds corporate bonds, government debt, mortgage-backed securities and real estate investments. TIAA-CREF said in November that Ed Grzybowski was stepping down as chief investment officer and would leave in March.The firm created the position of chief operating officer of asset management last year and assigned Carol Deckbar to the post, saying she would report to Evans.“We thank Scott for his many contributions and respect his decision to spend more time with his family,” Cohen said.--Editors: Dan Kraut, David Scheer
To contact the reporter on this story: Noah Buhayar in New York at nbuhayar@bloomberg.net
To contact the editor responsible for this story: Dan Kraut at dkraut2@bloomberg.net
sexta-feira, 20 de janeiro de 2012
quinta-feira, 19 de janeiro de 2012
Southwest May Delay Flying Growth to 2014 With Oil Near $100
(Updates share price in first, fifth paragraphs.)
Jan. 19 (Bloomberg) -- Southwest Airlines Co. may delay any expansion in flying to as late as 2014 as $100-a-barrel oil erodes profit growth, Chief Executive Officer Gary Kelly said. The shares rose the most in four weeks.Flights and seating capacity at the biggest discount carrier will be unchanged this year, and “we haven’t made a final decision about 2013 yet,” Kelly said today in an interview. “I don’t sense we’re going to see a significant increase in capacity in 2013, if we have any at all.”Analysts track airlines’ capacity because a tighter supply of seats improves carriers’ ability to increase prices. With Southwest paying an average of 35 percent more for each gallon of jet fuel in 2011, the Dallas-based airline is under pressure to curb a history of expanding faster than its peers.“Southwest has always been the bad boy for the industry,” said Ray Neidl, a Maxim Group LLC analyst in New York who has a “hold” rating on the stock. “Southwest is realizing they have to be a logical player as the other airlines reduce their costs and become more competitive.”Southwest climbed 3.3 percent to $9.32 at 11:28 a.m. in New York, the biggest advance since Dec. 20. The shares gained 5.4 percent this year through yesterday.Capacity rose 4.9 percent last year, Southwest said today. Higher energy costs are helping drive renewed efforts to cut spending and boost productivity at Southwest, which ordered more fuel-efficient jets and will add six seats to most planes as it refurbishes interiors.‘Never-Ending Search’“There is waste in every company, and there is a never- ending search to eliminate waste and increase productivity,” Kelly said. “We’ll be ramping up those efforts this year more than ever.”Kelly said he also wants to assess Southwest’s success in integrating operations with those of AirTran Holdings Inc., which was acquired in May, and whether financial results improve before making capacity decisions.“Our earnings are not where I want them to be in terms of expansion,” he said. “We’ll wait as long as possible before we make any commitments to 2013.”Fourth-quarter net income rose 16 percent to $152 million, or 20 cents a share, Southwest said today. Excluding benefits linked to fuel-purchase contracts, profit fell 43 percent to $66 million, or 9 cents, from $115 million, or 15 cents. On that basis, earnings exceeded the 8-cent average of 14 analysts’ estimates compiled by Bloomberg.Rising SalesSales rose 32 percent to a record $4.1 billion. Fuel was the company’s largest expense at $1.49 billion. Crude oil settled yesterday at $100.59 a barrel in New York, the ninth close at $100 or more through the year’s first 11 trading days. The 50-day moving average before today was $98.90.Southwest was the first major U.S. airline to report quarter results. The six biggest are expected to have a combined profit of $106.5 million, excluding one-time items, based on the average estimates of analysts surveyed by Bloomberg. That’s more than 70 percent less than a year earlier as fuel and lagging European demand weigh on results.Travel demand and airlines’ revenue outlook remains “strong,” Kelly said. Southwest’s revenue from each seat flown a mile rose 8.2 percent in the quarter, and its average fare per mile increased 4.1 percent. The extra seats on each plane should produce $250 million in new annual sales, Southwest has said.Southwest will add its own flights to Atlanta, AirTran’s main base of operations, and doesn’t plan now to add any other cities in 2012, Kelly said.While AirTran will add some destinations in Mexico this year, capacity gradually will be reduced as flights transfer over to Southwest, he said. Kelly said the carriers are moving toward receiving regulatory approval this quarter to combine operations.(Southwest will hold a conference call to discuss quarterly results at 12:30 p.m. New York time at southwest.com.investorroom.com.)--Editors: Ed Dufner, John Lear
To contact the reporter on this story: Mary Schlangenstein in Dallas at maryc.s@bloomberg.net
To contact the editor responsible for this story: Ed Dufner at edufner@bloomberg.net
Diane Garnick Seeks Lift for Wall Street Women With New Firm
(Updates with data on female MBAs, details on firm and Garnick’s background from fifth paragraph.)
Jan. 19 (Bloomberg) -- Diane Garnick, a former investment strategist at Invesco Ltd., said she is opening an asset management firm today that she hopes will help tilt the balance of the top Wall Street jobs more in favor of women.Garnick, who turns 45 today, said she is founding New York- based Clear Alternatives LLC with a staff of three other women that she plans to boost to 12 by the end of this year. The firm has lined up pledges from potential investors and her goal is to raise at least $500 million in assets under management by Dec. 31, she said.“One of the biggest challenges is for women to find an organization that’s willing to accept them back after they leave the work force to raise children without taking a cut in compensation and responsibility,” Garnick, who has two daughters and will be chief executive officer, said in a phone interview yesterday. “Our objective is to solve that problem.”Garnick joined Invesco in 2007 after working as a derivatives strategist at Merrill Lynch & Co. and an investment strategist at State Street Corp. She said she wants to help more women graduates from the best business schools go on to senior management roles in financial services.Women make up 18 percent of executive officers at Fortune 500 finance and insurance companies, according to a 2011 report from Catalyst Inc., a nonprofit organization that focuses on women and business. About 43 percent of master’s degrees in business administration and management in the 2009 to 2010 school year were conferred to women, according to the U.S. Education Department’s National Center for Education Statistics.Clear Alternatives will be a registered investment adviser and seek to manage funds from pensions, endowments and other asset managers, Garnick said.Garnick graduated from Hofstra University in Hempstead, New York, and last year earned a Master of Business Administration from the University of Chicago. She also is a Certified Public Accountant.--Editors: Joanna Ossinger, Dan Reichl
To contact the reporters on this story: Jeff Kearns in New York at jkearns3@bloomberg.net; Margaret Collins in New York at mcollins45@bloomberg.net
To contact the editors responsible for this story: Nick Baker at nbaker7@bloomberg.net; Rick Levinson at rlevinson2@bloomberg.net
quarta-feira, 11 de janeiro de 2012
South Korea to Start OTC Derivatives Clearing House to Cut Risks
Jan. 12 (Bloomberg) -- Korea Exchange Inc. plans to start a clearing house for over-the-counter derivatives trading in the fourth quarter as Asia’s bourses join global efforts to reduce risk in the largely unregulated market.
Korea Exchange, which operates the nation’s stock market, will first mandate clearing interest-rate swaps between financial firms operating in South Korea, Kim Jingyu, the president of the exchange’s derivatives market division, said in an interview at his Seoul office on Jan. 10. The clearing house will expand to other over-the-counter products such as credit- default swaps and cross-border trades, Kim said, without giving a time frame.Regulators worldwide are increasing scrutiny of over-the- counter derivatives after they were blamed in part for masking risk in the lead up to the 2008 credit crisis and the collapse of Lehman Brothers Holdings Inc. Governments globally are working to move the trades on to exchanges and through central clearing houses, which manage risk. The market reached $708 trillion at the end of June 2011, according to Bank for International Settlements data.“We’re making preparations to establish and operate a central counterparty for OTC derivatives transactions, in line with global moves,” Kim said. “It’s aimed at securing more stability in the financial system.”Interest-rate and credit-default swaps may be subject to mandatory clearing first, according to South Korea’s Financial Services Commission.Clearing houses operate as central counterparties for every buy and sell order executed by their members. Each party posts collateral to the clearing house, which is the intermediary in the trade, reducing the risk in the event a trader defaults on a deal as the counterparties would spread the open positions to the remaining members.Global EffortsThe Group of 20, comprised of the biggest industrialized and emerging economies, has promised to implement derivative reforms by the end of 2012.Hong Kong last year started consultations on proposals for regulation of the city’s over-the-counter derivatives market in a bid to reduce systemic risk. Singapore Exchange Ltd. began clearing non-deliverable forwards and standardized interest rate swaps in Singapore dollars and U.S. dollars. The Japan Securities Clearing Corporation began clearing over-the-counter credit defaults swaps on the iTraxx Japan Index in July. Regulators are drafting rules for an interest-rate swap clearing house.Korea Exchange is studying ways to list one-year bond futures after having introduced three-, five- and 10-year futures, and to introduce Chinese yuan futures “sometime in the future,” Kim said.Volatility FuturesThe exchange plans to list futures for the Kospi 200 Volatility Index “as soon as possible” after consultations with the nation’s regulators, Kim said. The gauge measures the volatility of options tied to the Kospi 200 Index. The Korean bourse, whose Kospi 200 futures contracts are currently being traded on CME Group Inc.’s Globex electronic network, is in discussions to start after-hours trading for U.S. dollar futures this year, Kim said.A derivative is a contract between two parties linked to the future value or status of the underlying asset to which it refers, including the development of interest rates or price of commodities such as oil or wheat. An over-the-counter derivative is one privately negotiated between two parties, rather than being traded on an exchange.-- With assistance from Jiyeun Lee in Seoul. Editors: Allen Wan, Ravil Shirodkar
To contact the reporters on this story: Saeromi Shin in Seoul at sshin15@bloomberg.net Eleni Himaras in Hong Kong at ehimaras@bloomberg.net
To contact the editors responsible for this story: Darren Boey at dboey@bloomberg.net Nick Gentle at ngentle2@bloomberg.net
SuperGroup Expects to Cut Prices From Autumn as Cotton Eases
(Updates with closing share price in fourth paragraph.)
Jan. 11 (Bloomberg) -- SuperGroup Plc, the U.K. owner of the Superdry fashion chain, expects to cut prices this year as it adds suppliers in India and cotton costs ease, Chief Executive Officer Julian Dunkerton said.“By the autumn you’re going to see price decreases,” the executive said in a telephone interview. “It will be partly the cotton issue and partly better sourcing.”Some of its most popular items like hoodies will remain static in price, the CEO said, while garments such as outerwear will fall, he said. The comments contrast with Next Plc, the U.K.’s second-largest clothing retailer, who last week forecast selling prices will be stable.SuperGroup fell 0.7 percent to 547 pence after earlier rising as much as 6.6 percent in London trading. The Cheltenham, England-based company said today same-store sales rose 5.8 percent in the nine weeks to Jan. 1 while wholesale revenue fell 4 percent.“While the retail performance is reassuring, the wholesale slowdown in the U.K. may continue to give some cause for concern on how far SuperGroup can extend its profile,” Sanjay Vidyarthi, an analyst at Execution Noble in London, said in a note. He has a “neutral” rating on the shares.The retailer has added suppliers in India and Turkey, Dunkerton said. “There will be some margin capture going forward and some price decreases,” he added.Solid Christmas“We’ve had a solid Christmas so you know I always say if you’ve got the right product everything will fall into place,” Dunkerton said.Accessories, knitwear and jackets did “incredibly well,” according to the executive. Sales of accessories more than doubled with phone covers, scarves and gloves.“Obviously the broader macro environment is interesting, but I really feel we’re making big product advances this year,” he said. “I feel comfortable.” The retailer is adding products across all its lines such as women’s perfume.SuperGroup, which opened a store on London’s busy Regent Street in December, said it’s on track to open 20 stores in the fiscal year ending in April. The company is “actively looking abroad, particularly Germany” to open stores, Dunkerton said.--Editors: Sara Marley, Marthe Fourcade
To contact the reporter on this story: Sarah Shannon in London at sshannon4@bloomberg.net
To contact the editor responsible for this story: Sara Marley at smarley1@bloomberg.net
Nexen $3.3 Billion Windfall Signaled With CEO Exiting: Real M&A
Jan. 12 (Bloomberg) -- The departure of Nexen Inc.’s chief executive officer is leaving the door open for a takeover that may reward shareholders with a $3.3 billion windfall.
The Canadian oil and natural-gas producer that failed to find a buyer last year climbed the most in three months with this week’s announcement that CEO Marvin Romanow was exiting immediately. Once worth as much as C$22.8 billion ($22.4 billion), Nexen declined 20 percent during Romanow’s three-year tenure and last month fell to 0.92 times book value, the lowest in at least 16 years, according to data compiled by Bloomberg.While Calgary-based Nexen has faced setbacks with oil-sands projects such as its Long Lake operation in Alberta, it’s now cheaper relative to earnings than 96 percent of North American oil exploration and production companies with market values greater than $1 billion, data compiled by Bloomberg show. The $9.4 billion company with oil and gas operations from West Africa to the North Sea may fetch at least a 35 percent premium in a takeover, said Edward Jones & Co.“You’ve removed one more stumbling block with the CEO leaving,” said Timothy Parker, a Baltimore-based portfolio manager who oversees about $4.5 billion in natural-resource stocks for T. Rowe Price Group Inc., Nexen’s largest shareholder. “It’s cheaper than average and so there is appeal there for an acquirer because you could likely buy it at an accretive price. You could pay a good premium and it could still be accretive.”Davis Sheremata, a spokesman for Nexen, declined to comment on takeover speculation.CEO’s ExitRomanow, who had worked at Nexen for 13 years and had been CEO since January 2009, was replaced by Chief Financial Officer Kevin Reinhart on an interim basis, the company said in a statement Jan. 9, without providing a reason for the exit. Gary Nieuwenburg, vice president overseeing Canadian operations at Nexen, also left. The shares gained 7.8 percent the next day, the most since Oct. 5.Nexen, which was formed when Occidental Petroleum Corp. combined its Canadian units into one company in 1971, lost about $2.1 billion in market value during Ronamow’s tenure, data compiled by Bloomberg show.Profit slumped in the third quarter as production fell below the company’s expectations and it took a longer time to start a platform at its Buzzard facility in the U.K.’s North Sea. The Long Lake oil-sands project has lagged initial output estimates since it started operating in January 2009. Also, the oil producer’s contract with Yemen expired last month after negotiations for an extension with the war-torn nation failed.‘Ton of Problems’“They’ve stepped on the sharp end of the rake every chance they got,” John Stephenson, who helps manage $2.7 billion, including Nexen shares, for First Asset Investment Management Inc. in Toronto, said in a phone interview. “They’ve had a ton of problems. So this was a decisive move, a bold move, and it certainly opens the door for a buyer.”Nexen’s combined equity and net debt is valued at 3.5 times its earnings before interest, taxes, depreciation and amortization in the last 12 months, making it cheaper than 77 of the 80 other North American exploration and production companies with market capitalizations higher than $1 billion, data compiled by Bloomberg show. The industry trades at a median of 8.7 times Ebitda.Shares of Nexen also slipped to a three-year low of C$14.63 on Dec. 14, the equivalent of an 8 percent discount to its book value, or the value of its assets minus liabilities. At 1.1 times book value as of yesterday’s close, it’s still cheaper than 91 percent of the industry, data compiled by Bloomberg show.‘Substantial Value’“There is substantial value to be unlocked,” Lanny Pendill, an analyst with Edward Jones in St. Louis, said in a phone interview. “It’s a company that has a pretty poor operational track record. If you think about what the assets are worth versus where the stock is trading, there’s a very large gap.”Nexen would demand a minimum of a 35 percent premium in an acquisition “because of how depressed the stock price is,” Pendill said. That would equate to C$24.45 a share, or about C$12.9 billion -- C$3.35 billion ($3.29 billion) more than the company’s current market value. A buyer would also have to assume C$3.45 billion in net debt.T. Rowe Price’s Parker said stockholders would want a bid “in the C$20s” and would be “shocked” if investors turned down an offer higher than C$25 a share.While a slumping stock price led Nexen to consider options such as a sale last year, the company decided it wouldn’t get a high enough premium and instead should focus on fixing problems at its Long Lake oil-sands facility, Romanow said at the company’s investor day on Dec. 1.Exploring a Sale“We looked at selling the company,” Romanow said. “We looked at selling major assets. We looked at setting up separate companies. We looked at every financial re-engineering that was done in our industry and in other industries to see if there was a way to generate some value for you sooner.”Nexen shares had climbed on takeover speculation in December 2008 when the FT Alphaville website reported that Total SA, Europe’s third-largest oil company, was preparing a C$38-a-share bid. A day later, the Times of London reported that Total had abandoned the plans.While Nexen’s discount relative to peers may draw takeover interest, buyers may be wary because of its diverse assets and locations and operational setbacks in recent years, particularly in the oil sands, Sam La Bell, an energy and special situations analyst at Veritas Investment Research Corp. in Toronto, said in a phone interview.“People who are looking for bargains have been looking at Nexen because it is so cheap,” La Bell said. “But the operational performance would pose a real challenge.”Nexen’s AssetsStill, Nexen would give a buyer access to Canada’s vast oil deposits, offshore production in the U.K.’s North Sea, West Africa and the Gulf of Mexico and drilling opportunities in shale rock formations. Nexen produced the equivalent of 164,000 barrels a day of oil in the third quarter and had reserves of 919 million barrels of oil at the end of 2010, according to data compiled by Bloomberg.ConocoPhillips, the third-largest U.S. oil company, may be interested in Nexen as it plans to spin off its refining business this year, Ted Harper, who helps manage about $6.8 billion in assets for Frost Investment Advisors LLC in Houston, said in a phone interview. The Houston-based company has about $6 billion in cash and near-cash items, data compiled by Bloomberg show. A phone call to the ConocoPhillips media line wasn’t returned.Chinese BuyersAdditional potential acquirers may include other cash-rich oil companies from Exxon Mobil Corp. to Royal Dutch Shell Plc, as well as companies in China, according to T. Rowe Price’s Parker. Exxon had $11 billion in cash at the end of the third quarter while Shell had $19 billion, the data show.Kimberly Brasington, a spokeswoman for Irving, Texas-based Exxon, and Kayla Macke, a spokeswoman for The Hague-based Shell, declined to comment on market speculation.“As far as who could buy it, it could be any number of people,” Parker said in a phone interview. “You’ve got a lot of big, major oils with a bunch of cash and balance sheets to handle a deal of this size, and you’ve got a lot of Chinese companies that might be interested.”Companies in China announced about $12.9 billion worth of bids last year for overseas oil and gas explorers and producers, excluding terminated deals, according to data compiled by Bloomberg.“I absolutely think the CEO leaving opens the door for a lot of possibilities” for Nexen, said Stephenson of First Asset. “The long and short of it is that the company lacks strategic direction, it didn’t deal with its problems early and so a buyer might be interested because of valuation.”--Editors: Sarah Rabil, Daniel Hauck.
To contact the reporters on this story: Tara Lachapelle in New York at tlachapelle@bloomberg.net; Bradley Olson in Houston at bradleyolson@bloomberg.net.
To contact the editors responsible for this story: Daniel Hauck at dhauck1@bloomberg.net; Katherine Snyder at ksnyder@bloomberg.net; Susan Warren at susanwarren@bloomberg.net.
Goldman Sachs Names Paradise, Ueda to Run Securities in Asia
Jan. 11 (Bloomberg) -- Goldman Sachs Group Inc., the U.S. bank that gets more than 60 percent of its revenue from trading, named James R. Paradise and Eiji Ueda co-heads of the firm’s securities division in Asia.
Paradise, who is based in London, and Ueda, who works in Tokyo, will move to Hong Kong to assume their new responsibilities, according to an internal memo obtained by Bloomberg News. They will report to Katsunori Sago, deputy president of Goldman Sachs Japan, and to David C. Ryan, president of Goldman Sachs Asia Pacific Ex-Japan.Paradise and Ueda are assuming some of the responsibilities previously held by Yusuf Alireza, who left Goldman Sachs in November after 19 years at the company. Alireza, who oversaw the securities division in Asia, was promoted a year ago to be co- president of the Asia-Pacific region outside Japan with Ryan.Goldman Sachs’s securities division, which handles sales and trading of equities, fixed-income, currencies and commodities, has been managed globally since 2008 by David B. Heller, Edward K. Eisler, Pablo J. Salame, and Harvey M. Schwartz. The company generated $14.2 billion in revenue from its institutional client sales and trading business in the first nine months of 2011, down 22 percent from a year earlier.Paradise, 47, has been co-head of Goldman Sachs’s global securities services, futures and execution business since 2008, according to the memo. A British citizen, he joined the firm in 1989, was promoted to managing director in 2000 and became a partner in 2004. In his new role he will be a member of the Asia Pacific Management Committee as well as co-chair, with Ueda, of the Securities Division Asia Pacific Operating Committee, according to the memo.Ueda’s Committee MembershipsUeda, a Japanese citizen who joined Goldman Sachs in 1991 and has been a partner since 2002, has been co-head of fixed- income, currencies and commodities in Japan since 2009, according to the memo. He is co-chair of the Asia Pacific Risk Committee and is a member of the Asia Pacific Management Committee, Securities Division Asia Pacific Operating Committee, Korea Operating Committee and Firmwide Risk Committee.Michael DuVally, a Goldman Sachs spokesman in New York, confirmed the contents of the memo, which was signed by Heller, Eisler, Salame and Schwartz. Reuters reported Paradise and Ueda’s new assignments earlier today.--Editors: William Ahearn, Steve Dickson
To contact the reporter on this story: Christine Harper in New York at charper@bloomberg.net
To contact the editor responsible for this story: David Scheer at dscheer@bloomberg.net.
Prudential Promotes Mahmud to Run $127 Billion at Jennison
(Updates with ages of executives in the second paragraph.)
Jan. 10 (Bloomberg) -- Prudential Financial Inc., the second-largest U.S. life insurer, promoted Mehdi Mahmud to chief executive officer of Jennison Associates LLC, the investment unit with about $126.7 billion in assets under management.Mahmud, 39, who was chief operating officer of the unit, is taking the CEO post from Dennis Kass, 61, who is remaining chairman, according to a statement today from the Jennison business of Newark, New Jersey-based Prudential. Ken Moore, 41, previously the chief administrative officer, was named COO.Prudential is promoting executives after hiring David Hunt, who joined the insurer in November as head of investments. Hunt, a former senior partner at McKinsey & Co., is in charge of an operation that oversees more than $580 billion as CEO of Prudential Investment Management.“Mehdi’s experience as chief operating officer at Jennison and Dennis’ ongoing active role will ensure continuity and stability,” Hunt said in the statement.The promotions have “no impact” on Jennison’s investment teams, the company said. Jennison, which began managing money in 1969, sells mutual funds and other investment services to a customer base that include institutions and private clients.--Editors: Dan Reichl, William Ahearn
To contact the reporter on this story: Andrew Frye in New York at afrye@bloomberg.net
To contact the editor responsible for this story: Dan Kraut at dkraut2@bloomberg.net
Dollar Stores Cashing In
Wall Street Compensation Cuts Coming?
terça-feira, 10 de janeiro de 2012
Carlyle Founders Made $413 Million Last Year Before Planned IPO
Jan. 11 (Bloomberg) -- Carlyle Group, the Washington-based private-equity firm seeking to go public, said its three founders received a combined $413 million last year as profits rose.
William Conway, Daniel D’Aniello and David Rubenstein each earned a $275,000 salary, a $3.55 million bonus and $134 million in distributions, the firm said yesterday in a filing with the U.S. Securities and Exchange Commission. Carlyle said it doesn’t plan to create a compensation committee as it prepares to go public, leaving decisions regarding the founders’ pay in their own hands.Carlyle’s founders “have historically made all final determinations regarding executive officer compensation,” the firm said in its filing. “The board of directors of our general partner has determined that maintaining our current compensation practices following this offering is desirable and intends that these practices will continue.”Compensation of private-equity managers and their taxation has come under scrutiny by U.S. lawmakers, who have been considering proposals to tax some distributions at the higher rate for personal income. Mitt Romney, the former Bain Capital LLC chief executive officer who is seeking the Republican presidential nomination, was attacked this week for his role in the buyout industry by rivals who said he enriched himself at the cost of corporations and their employees.Nasdaq ListingCarlyle said net income for the nine months through Sept. 30 rose to $918.1 million from $571.1 million a year earlier and revenue rose 60 percent to $2.01 billion. The firm returned $15 billion to its limited partners during the same period, the most it has ever distributed over a nine-month period, according to an investor.Carlyle plans to list shares on the Nasdaq under the symbol CG. It hasn’t set a price range or the number of shares it aims to sell. In seeking to offer shares to the public, the buyout firm follows New York-based rivals Blackstone Group LP and KKR & Co.Stephen Schwarzman, chief executive officer of Blackstone, earned $398.3 million in 2006, the year before his firm went public. Blackstone raised $4.75 billion in its 2007 IPO.Carlyle, which oversaw $148 billion in assets as of Sept. 30, said it expects to hire more employees after the offering.--Editors: Christian Baumgaertel, Steven Crabill
To contact the reporters on this story: Devin Banerjee in New York at dbanerjee2@bloomberg.net; Cristina Alesci in New York at calesci2@bloomberg.net
To contact the editors responsible for this story: Christian Baumgaertel at cbaumgaertel@bloomberg.net
Morgan Stanley Says Rates Strategist Caron Succeeded by Mutkin
(Adds Caron’s career history in the third paragraph.)
Jan. 10 (Bloomberg) -- Morgan Stanley said James Caron, head of U.S. interest-rate strategy, has left the primary dealer and his responsibilities will be assumed by Laurence Mutkin.Mutkin, head of European fixed-income strategy in London, will become global head of interest-rate strategy, according to Sandra Hernandez, a New York-based spokeswoman at Morgan Stanley. Mutkin has worked at the owner of the world’s largest brokerage since February 2006.Caron, 42, joined Morgan Stanley in July 2006 from Merrill Lynch & Co., where he worked as head of cross-rates strategy, generating trading ideas for U.S. and foreign government bonds and derivatives. Caron, who was based in New York, did not immediately return calls requesting comment.In a Nov. 23 telephone interview, Caron said the Federal Reserve would begin purchasing mortgage securities as soon as June because fiscal policy makers would be unable to agree on programs to boost the economy. Morgan Stanley is one of the 21 primary dealers that trade directly with the central bank.Fed officials “can only urge fiscal policy makers to do the right thing,” Caron said. “If fiscal policy makers screw it up, then that just means the Fed has to be more aggressive in terms of what they’re doing.”Greater CommunicationCaron forecast in a Dec. 8 note to clients that the Fed would step up efforts to communicate its intention to keep monetary policy accommodative further into the future in order to spur growth and inflation. “Our core view is that the Fed will act aggressively to ease financial conditions in the months ahead,” he wrote.After Morgan Stanley began 2010 with a forecast that the U.S. economy would strengthen, lead to private credit demand, higher stock prices and diminish the refuge appeal of Treasuries, pushing 10-year yields to 5.5 percent, Caron apologized to clients in a note published Aug. 19, 2010. The 10- year yield was 2.58 percent at the time.Caron has undergraduate degrees in physics and aeronautical engineering from Bowdoin College in Maine and California Institute of Technology, and a Master of Business Administration from New York University.--Editors: Dave Liedtka, Paul Cox
To contact the reporter on this story: Daniel Kruger in New York at dkruger1@bloomberg.net; Jody Shenn in New York at jshenn@bloomberg.net
To contact the editor responsible for this story Dave Liedtka at dliedtka@bloomberg.net
Ackman Canadian Pacific Proxy Challenge Tied to Rival Ex-CEO
(Updates with closing share price in ninth paragraph.)
Jan. 10 (Bloomberg) -- William Ackman’s plan to wage a proxy fight to install a new chief executive officer at Canadian Pacific Railway Ltd. pivots on the legacy of the CEO who once led the carrier’s larger rival.New directors “supportive of a change in leadership” would back the hiring of Hunter Harrison, the retired Canadian National Railway Co. chief, Ackman said yesterday in an interview. His Pershing Square Capital Management LP is Canadian Pacific’s biggest shareholder.Harrison, 67, more than tripled net income during seven years running Canadian National with an approach known as “precision railroading.” Ackman has put the retired CEO at the center of his turnaround plan for Canadian Pacific, the least- efficient major railroad in North America.Half of Ackman’s argument to investors “is going to be what these guys have done wrong” at Canadian Pacific, Chris Wetherbee, a Citigroup Global Markets Inc. analyst in New York, said in an interview. “Half of it is what they could probably do better by instilling some of the virtues that Hunter has done with the precision railroading” at Canadian National.The gap between Ackman and the board at Calgary-based Canadian Pacific widened yesterday after Chairman John Cleghorn released a letter rebuffing the idea of ousting CEO Fred Green, 55. Ackman responded in the interview that he would seek a proxy fight and that Harrison would be CEO “once we are successful.”‘Team Player’“We are fully, we are unanimously behind our CEO Fred Green and his management team,” Cleghorn said in a telephone interview. Green, who became CEO in May 2006, has “been in the company for a long time. He grew up in the company, and he’s a real team player. He’s been a great recruiter.”Ed Greenberg, a railroad spokesman, said the company had no further comment on Ackman’s plans. Harrison has declined to discuss Ackman’s campaign at Canadian Pacific.Given “the globalization of our markets and definitely the fact that Canadian and American businesses are ever increasingly joined by the hip, it’s not unusual for an American shareholder to take an activist stance in a Canadian corporation,” said Michael Schafler, a partner at Toronto law firm Fraser Milner Casgrain LLP.Ackman TargetsAckman invests in companies he deems undervalued and seeks changes to improve shareholder returns. Canadian Pacific’s U.S. shares fell 0.2 percent to $67.63 at the close in New York. They have gained 9.3 percent from Oct. 27, the day before Pershing disclosed its initial stake. The hedge fund’s holding is 14.2 percent, according to a Dec. 13 filing.The stock probably will be volatile until May, when Canadian Pacific shareholders may vote, because the proxy battle looks poised to drag on until then, Jason Seidl, a New York- based analyst with Dahlman Rose & Co. said in a note to clients yesterday.Ackman said last week he turned down the railroad’s offer of a seat for him on a board that now has 15 members and asked that Harrison and a nominee whom he hasn’t identified become directors. He told the Wall Street Journal yesterday he will hold a meeting for shareholders next month.When Harrison retired from Canadian National at the end of 2009, the operating ratio, a measure of efficiency, had been cut to 67.3 from 76 at the end of 2002, filings show. Canadian Pacific’s ratio was 75.8 in 2011’s third quarter, and 77.6 for all of 2010, according to Bloomberg Industries data.Before running Canadian National, Harrison led Illinois Central Corp., which was bought by the larger carrier in 1998.‘Compelling Credentials’He “brings compelling credentials,” Fadi Chamoun, a Toronto-based analyst with BMO Capital Markets, wrote in a note to clients. Making him CEO “could fuel the current momentum in the share price even further,” Chamoun wrote. He and Seidl are among 16 analysts rating Canadian Pacific as hold, according to data compiled by Bloomberg. Six say buy and one says sell.Harrison helped champion the concept of so-called precision railroading, with trains at set times and trip plans for each car or container to ensure reliable deliveries. Maintaining freight schedules has long been an industry challenge.He “is intimately familiar with Canada’s customers, unions and relevant regulations,” Ackman wrote in a letter to Cleghorn last week. “He can hit the ground running and effect the transformation faster, better and with less risk than any alternative candidate.”Railroad ResponseCanadian Pacific’s board “carefully considered” and unanimously turned down Ackman’s proposal to change leadership, Cleghorn said in the letter to railroad shareholders.Switching CEOs now would jeopardize a multiyear plan to strengthen Canadian Pacific’s performance, and neither Pershing Square nor Harrison has a detailed strategy to attain the goal of improving the operating ratio, Cleghorn wrote.Ackman has advocated cutting the operating ratio to 65 by 2015. Cleghorn responded that no railroad has ever posted that rapid an improvement from where Canadian Pacific started, saying that New York-based Pershing failed “to take into account the structural differences that exist between CP and its peers.”Canadian Pacific’s network runs through the Canadian Rockies and the U.S. Upper Midwest. Canadian National’s track system includes lines in the eastern portion of the country, where elevations are lower, and into the southern U.S.‘Solid’ PlanCanadian Pacific’s plan to lower its operating ratio to the low 70s in the next three years is “solid,” Cleghorn said.“Management is committed to it, and we think it would be highly disruptive to change all that, to just change at the top for the sake of it, given our unique railroad and circumstances,” Cleghorn said in the interview.North American railroads have seen showdowns before with activist shareholders. An alliance led by TCI Fund Management LLP won four seats on CSX Corp.’s board in 2008 to press for bigger returns to investors. Those directors still were only a third of the total, and TCI sold its 4.5 percent stake in 2009.Citigroup’s Wetherbee, who has a neutral rating on Canadian Pacific, said “it could be a bit of a challenge” for Ackman’s Pershing to go beyond winning some board seats and get enough control to install a new CEO.What Ackman may be able to do is argue that the railroad’s plan hasn’t been “effectively implemented” and that he can “leverage the plan that’s in place but with better executors, guys who are more proven,” Wetherbee said.--Editors: Ed Dufner, Stephen West
To contact the reporter on this story: Natalie Doss in New York at ndoss@bloomberg.net
To contact the editor responsible for this story: Ed Dufner at edufner@bloomberg.net
Boys' Clubs: The Invisible Affinity Groups
An affinity group is basically any association or organization that provides support to a particular demographic: women, African Americans, Latinos, people over 65, etc.
The goal of an affinity group –- an organization for female MBAs, for example — is often to help members contend with obstacles or other situations that they are more likely to face than others, to level the playing field. Such affinity groups can help cultivate talent and leadership their ranks.
Some onlookers, however, react negatively to affinity groups. Don’t affinity groups, they ask, promote exclusion? The answer is no, if they are structured properly. But that’s an article for another day.
For now, let’s get to another intriguing question: Have you ever seen an affinity group for white men? I know of none – – on paper, that is. White male affinity groups are hardly the rage.
In fact, white men sometimes react with rage when they see affinity groups, which they view as designed for everyone but them. If you are a white man with such a sentiment, hold onto that feeling the next time someone talks to you about feeling excluded or marginalized.
Even though there are no formal white male affinity groups of which I am aware, some organizations have informal affinity groups for white men, often termed “boys’ clubs.” In the business world, the proverbial boys’ club is a powerful circle of men, usually white, whose connections and alliances help advance them within an organization or silo. An all-male board of directors or an all-male executive team may be a boys’ club. As noted below, however, numbers alone are not determinative.
How do you know if you have a boys’ club? It’s rare that you’ll find a “smoking cigar.” In most case, the club is not a creation of conscious design. Rather, it derives from an unconscious bias that remains stubbornly persistent in many parts of the corporate world. We all know that there is unknowing bias in our society. And most of us are equally certain that it does not exist in our own organizations.
The discrimination often amounts to what the EEOC refers to as a “like-me” bias. People tend to feel more comfortable with others with whom they share similarities — experiences, interests, and connections. This holds particularly true when it comes to mentoring. Leaders often mentor people who remind them of themselves in certain ways. Most white men don’t see a woman of color when they look in the mirror.
Even in organizations where men dominate in all respects, you’ll often find a sincere belief that no boys’ clubs exist. Plenty of people who drink martinis at 8 a.m. sincerely believe they don’t have an alcohol problem.
A common defense to allegations of a boys’ club is that there are women in the inner circle. But the fact that women belong doesn’t disqualify it as a boys’ club. At the danger of generalizing, the women in the club are often what I call YADs: young, attractive, and drinkers. Sometimes these women will adamantly rebut any claim that there’s a boys’ club. They may feel less certain when they find themselves excluded as they get older, are perceived as less attractive, or don’t want to keep “drinking with the guys.” Yes, alcohol is often an integral part of the boys’ club. Jack Daniels holds a membership to many.
At the same time, the fact that the governing body is predominantly male doesn’t necessarily mean that a boys’ club exists. I’ve found that many boys’ clubs live outside the governing body. Think back to high school and the “in crowd.” (If you don’t think your school had an “in crowd,” then you were in it.) The student council president often wasn’t in the “in” crowd. The same may be true of an organization’s leadership team: It could possess fair-minded, progressive officers but still have a culture dominated by a huge sales team consisting of narrow-minded jerks, for example.
Detour Your Way to the CEO Spot
Do you hope to become chief executive of a respected industrial company someday? Don’t assume that by vigorously applying your core strengths and learning everything there is to know about your industry you will climb the leadership ladder all the way to the C-suite.
Talk with CEOs across industries, and you soon realize that the route to the corner office often involves some uncomfortable detours. Take them. I recommend three in particular.
First, detour out of your geographical comfort zone. Scan the top 100 companies on the 2011 IndustryWeek U.S. 500, and you’ll see that a quarter of the manufacturing CEOs worked and lived outside the U.S. in the course of their careers.
When Rakesh Sachdev, now CEO of Sigma-Aldrich, was with Cummins, he moved to Mexico, though he knew no Spanish at the time. When he was with ArvinMeritor, he worked in China. “My four years in Beijing were perhaps the most formative of my career,” he says. “I was immersed in a frenzied emerging market, which might have proved bewildering to some, but it still energizes me two decades later.”
Dinesh Paliwal, chairman and CEO of Harman International, a maker of audio and infotainment systems, says that no textbook can fully prepare you for, say, conducting negotiations in Stockholm, where you need to build a consensus at all costs, or Stuttgart, where you have to dot the i’s and cross the t’s, or Tokyo, where you must bow frequently.
“My experiences in navigating different countries and cultures are a highlight of my career,” he says.
Today, he looks for global business experience in every hiring decision. “Among my dozen direct reports at Harman, seven different nationalities are represented,” he says. “All have lived and worked in multiple countries.”
Second, detour out of your industry comfort zone. A full third of the manufacturing CEOs on the IndustryWeek U.S. 500 previously worked in an industry other than the one in which they currently are a chief executive. When Sachdev came to Sigma-Aldrich as CFO in 2008, he was stepping out of the automotive sector, where he had worked for decades, into specialty chemicals and life sciences.
Before Mark Blinn joined Flowserve, a manufacturer of fluid motion and control products where he is now CEO, he worked in technology services (EDS), homebuilding (Centex), and consumer services (FedEx Kinko’s). “I went into each new setting with extreme curiosity,” he says. “It can be a mistake to look too quickly for the next move, but when I saw a new learning environment where I could grow, I didn’t hesitate.”
Finally, detour out of your competency comfort zone. Many CEOs will tell you that if you feel comfortable in your role, it’s probably time to take on a new challenge.
“When I was 43 years old,” recalls John Williamson, CEO of Atkore International Holdings, a maker of galvanized steel tubes, pipes, and building components, “I was considered the best operations guy at Danaher, a company known for operations. I felt very confident, very secure. But I intentionally moved myself out of what I knew best into a very different kind of job at ITT.”
He says that in that new corporate role, as opposed to an operational role, he had to develop a whole new set of skills, especially the ability to influence others, since he had little formal authority. “I was helped along by some great mentoring from my CEO,” he says, “and I was afforded a bird’s eye view of the CEO’s role.”
Within a couple of years he moved into general manager positions to run global businesses for ITT, demonstrating his readiness for a top job. “Based on my own experience,” he says, “I’d advise anyone who aims to be a CEO to let go of what you’re great at and be brutally honest with yourself about where you’re weak. Don’t hide your deficiencies. Attack them.”
Sanjay Gupta leads the global industrial practice of Egon Zehnder International. Prior to his career in executive search, he held senior marketing positions at the Mahindra Group and at Pangborn Corp.domingo, 8 de janeiro de 2012
Sara Lee Appoints Campbell’s Connolly CEO of Meat Business
Jan. 6 (Bloomberg) -- Sara Lee Corp., the food company that plans to spin off its coffee unit this year, named Sean Connolly chief executive officer of its North American meats business.
Connolly, 46, will leave Campbell Soup Co., where he is president of its North America unit, Downers Grove, Illinois- based Sara Lee said today in a statement. He previously worked in various roles including marketing at Procter & Gamble Co.Sara Lee is splitting itself up to give the companies more flexibility to make acquisitions and boost value for investors. Prior to the spinoff, Connolly will run the company’s North American retail and foodservice unit. He succeeds CEO Marcel Smits, who has lead Sara Lee since September.Sara Lee, the maker of Ball Park hot dogs and Douwe Egberts coffee, was little changed at 9:33 a.m. in New York. The shares rose 8.1 percent last year.--Editors: James Callan, Kevin Orland
#<117117.4371737.2.1.95.14779.25># -0- Jan/06/2012 14:37 GMT
To contact the reporter on this story: Duane D. Stanford in Atlanta at dstanford2@bloomberg.net
To contact the editor responsible for this story: Robin Ajello at rajello@bloomberg.net
Stanley Kwan, Creator of Hang Seng Stock Index, Dies at 86
(Adds comments by former colleague in eighth paragraph.)
Jan. 6 (Bloomberg) -- Stanley Kwan, the banker whose 1969 creation, the Hang Seng Index, became a widely used gauge for the Hong Kong Stock Exchange, has died. He was 86.He died Dec. 31 at Scarborough Grace Hospital in Toronto, according to the website of Toronto’s R.S. Kane Funeral Home. The cause was heart failure, the Toronto Star reported.The Hang Seng Index is “the ultimate capitalist measure of Hong Kong,” Robert Nield, president of the Royal Asiatic Society’s Hong Kong branch, wrote in a foreword to Kwan’s 2008 book, “The Dragon and the Crown: Hong Kong Memoirs.”As a banker at Hang Seng Bank Ltd. from 1962, Kwan saw his creation mirroring the growth pains of Hong Kong, with the index crashing during the 1974 world oil crisis and the 1983 impasse between China and Britain during handover talks, as well as benefiting from the opening up of the mainland. The index’s 48 members now include Industrial & Commercial Bank of China Ltd., the world’s largest lender by market value, and PetroChina Co., Asia’s biggest company by market value.As Kwan told it in his book, the bank’s chairman, Ho Sin Hang, and general manager, Q. W. Lee, decided late in 1969 “that they needed a measure of the performance of the stock market for their own as well as their customers’ reference.” Kwan said Ho spoke of creating the “Dow Jones Industrial Average of Hong Kong.”Setting Base DayAccording to the draft notes for a speech Kwan gave in 2009 in Vancouver, the Hong Kong economy had hit “rock bottom” after riots related to the Cultural Revolution swept the city in 1967. He said some within Hang Seng Bank had questioned the plan for the index as it was “only a small Chinese bank.”Kwan, who headed the bank’s research department, said he led a staff of seven in consulting government and university statisticians and economists.“Stanley was willing to accept opinions and he was good at incorporating different ideas,” said Roger Luk, a former deputy chief executive officer at Hang Seng Bank who worked with Kwan for seven years. “He never gave himself all the credit for founding the Hang Seng Index. He seldom boasted about this achievement.”For the index’s “base day” -- the normal period of trading that other days would be compared with -- Kwan and his group settled on July 31, 1964. The group chose the initial 33 companies that would be the index’s constituent stocks, as well as guidelines for replacing or adding other companies in the future. The Hang Seng Index debuted on Nov. 24, 1969.No Lasting Fame“In the end, the system worked well,” Kwan wrote. “By the time I retired in 1984, the number of companies listed on the Hong Kong Stock Exchange had increased to over 250, but the number of constituent stocks remained 33, and these companies still accounted for about 75 percent of total market value (based on the average for the last 12 months) and over 70 percent of total market turnover (based on the aggregate for the last 24 months).”Kwan, who retired to Canada, said in a December 2010 interview with the Toronto Star that his role in history earned him no lasting fame.“If I walked into the Hang Seng Bank head office today, no one would know me,” he said.Stanley Shih Kuang Kwan was born on Jan. 10, 1925, in Hong Kong to a banking family, according to the funeral home. A survivor of the Japanese occupation of Hong Kong during World War II, he served as a wartime interpreter for U.S. troops on mainland China before starting his banking career.Hired by Hang Seng Bank in part because he spoke both English and Chinese, Kwan was made head of research, according to the 2010 Toronto Star profile.‘Test of Time’“The index he created has stood the test of time,” said Andrew Sullivan, principal sales trader at Piper Jaffray Asia Securities Ltd. in Hong Kong. “It has given a good indication of the performance of the Hong Kong market in general and with a number of changes implemented over the years still does.”After Kwan’s retirement, the index climbed to a high of 16,673.27 on Aug. 7, 1997, before the Asian financial crisis sent it tumbling. The government spent HK$118 billion ($15.2 billion) buying shares in the last two weeks of August 1998, supporting the gauge.The Hang Seng Index also fell to a 4 1/2-year low in April 2003, when the city was swept by an outbreak of the severe acute respiratory disease, an illness brought over by a Chinese visitor, underscoring the city’s increasing ties with the mainland.The index rose to a record 31,638.22 points on Oct. 30, 2007, a year before Lehman Brothers Holdings Inc.’s collapse and the global banking crisis drove equities down. As of yesterday, the gauge was 41 percent below its peak.Kwan’s wife, Wing Kin, predeceased him, according to the funeral home. Survivors include their two daughters.--With assistance from David Wilson in New York, Kana Nishizwa, Lynn Thomasson and Stephanie Tong in Hong Kong. Editors: Steven Gittelson, Stanley James.
To contact the reporter on this story: Laurence Arnold in Washington at larnold4@bloomberg.net.
To contact the editor responsible for this story: Charles W. Stevens at cstevens@bloomberg.net
Tata to Undo ‘Stigma’ on Nano With Upgrades to Boost Sales
(Updates with closing share price in sixth paragraph. See SHOW
--Editors: Vipin V. Nair, Arijit Ghosh
To contact the reporters on this story: Siddharth Philip in Mumbai at sphilip3@bloomberg.net; David Merritt in London at dmerritt1@bloomberg.net
To contact the editor responsible for this story: Young-Sam Cho at ycho2@bloomberg.net
sábado, 7 de janeiro de 2012
Sony Says Board Hasn’t Decided to Elevate Hirai to President
Jan. 6 (Bloomberg) -- Sony Corp. said it hasn’t made a formal decision to elevate Executive Deputy President Kaz Hirai to president.
No decision has been made by Sony’s board, which is entrusted with making such appointments, Shiro Kambe, a company spokesman in Tokyo, said today in an e-mail. He declined to comment further.The Japanese news service Nikkei reported earlier that Hirai, 51, would be promoted to president by April, while Chairman and Chief Executive Officer Howard Stringer would retain his posts. Such a move would be in keeping with the consumer electronics company’s current succession plans.Stringer, 69, told Bloomberg Businessweek in November that he doesn’t plan to step down soon. His latest three-year turnaround plan ends in March 2013, at which point Hirai probably will take over, according to several people interviewed for that story.--With assistance from Cliff Edwards in San Francisco. Editors: Anthony Palazzo, Rob Golum
To contact the reporter on this story: Bryan Gruley in Chicago at bgruley@bloomberg.net
To contact the editor responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net -0- Jan/06/2012 20:36 GMT
Ten Innovation Resolutions for 2012
Let’s face it: Last year was a tough one, by all measures. The sluggish global economy and European debt crisis curtailed our confidence, Congress’s behavior scared us all, and the twin trends of a shrinking tax base and runaway health-care costs made it hard to envision a turnaround.
This is precisely why innovation is so critical at this moment. Maneuvering through these uncharted waters requires much more than traditional efforts. Resolve to follow these 10 innovation resolutions that I think you will find valuable for 2012.
1. Spend some of that cash. USA Today recently reported that corporations are sitting on approximately $3 trillion in cash, yet management teams are acting as conservative as ever, trying to squeeze ever-more productivity from their organizations. Has anyone ever heard the expression, “you can’t shrink your way to greatness?” The marketplace doesn’t sit still and neither should you. Don’t ignore the need for systemic innovation if you want to be a leader—and recognize that there are costs attached.
2. Expand your business model. Resolve to uncover one new way to make money per month and you will find yourself with a healthy portfolio of innovation projects to keep you busy all year. You can find inspiration by studying emerging companies that use the power of networks to scale quickly. (What better way to spend some of that cash?)
3. Make a plan to export. According to the U.S. Commerce Dept., less than 1 percent of America’s 30 million companies export. The U.S. lags behind all other developed countries in this regard. With growth slow here at home, why not find new markets in other parts of the world worth your time and attention?
4. Automate. Whether they are personal or business matters, technology exists to automate anything that can be reduced to an algorithm. Consider the opportunity to drive convenience and delight for yourself or your customers by making time-consuming activities easier to manage.
5. Explore a greater number of future scenarios. In a world where “black swan” events seem to happen fairly regularly, you should invest time in looking at how alternate realities could affect your results. Futures modeling that uses a variety of extreme trends can really put you in touch with what could happen—both good and bad.
6. Do a few things very well. Most companies want to do too much. In the process, they starve good ideas by funding marginal ideas at the same time. Steal a play from the Apple book: Pick one thing that matters to your customers that your competitors do miserably and own the world-class solution to it.
7. Become a wizard. Invest time in training yourself on something you find vexing to understand or manage. Social media? Design thinking? Open innovation? Emerging markets? You’ll find no shortage of topics to master if you want to stay ahead of the pack. Treat yourself to some new wisdom.
8. Fight for labor reform. I’ve noticed a common denominator in industries where the U.S. lags in terms of innovation and customer experience: the existence of strong labor unions that have fought to maintain the status quo in the face of dramatically changing market conditions. The health-care, education, and public transportation industries rank among the worst when it comes to putting customers before workers. If we are to stay competitive, these workforces need radical transformation—sooner, rather than later.
9. Hire more millennials. The super-smart, high energy, socially minded, can-do people aged 21-34 are experiencing a very high rate of unemployment at the moment. If you want to revitalize your company with positive energy, look no further for fuel for the fire.
10. Stop doing unproductive stuff. Make room for doing new types of productive things by jettisoning ones that aren’t helping you move ahead in a significant way. Meetings, people, processes, and “duties” all make good candidates for reform or elimination.
Jeneanne Rae founded Motiv Strategies, a consulting firm specializing in innovation. She has worked in the field of innovation and design for more than 20 years, holding positions at Peer Insight and IDEO. For the last decade, Rae has taught new product development and service development as an adjunct professor at Georgetown University's McDonough School of Business. She has an MBA from Harvard Business School. She can be reached at jrae@motivstrategies.com.Dell Names Felice Chief Commercial Officer to Boost Sales
(Adds closing share price in final paragraph.)
Jan. 6 (Bloomberg) -- Dell Inc. named Steve Felice president and chief commercial officer, overseeing all its sales and marketing efforts as the company aims to sell more packages of technology products and services to businesses.Felice had been president of the world’s third-largest personal-computer maker’s consumer and small-and-midsize business sales and will now head all corporate, consumer and government units, Dell said in a statement. Paul Bell, who ran sales to large businesses and governments, will retire in March.The moves are designed to help Dell develop and market groups of products that better meet customers’ needs, the company said. Round Rock, Texas-based Dell is seeking to transform from a low-cost PC maker into a broader supplier of computing devices, data-center equipment, software and technology services.“This is still a company in transition,” said Shaw Wu, an analyst at Sterne Agee & Leach Inc. in San Francisco, in a telephone interview. Felice, who headed the company’s Asian operations until 2010, may help as it seeks more sales outside the U.S., Wu said. “He definitely has a track record of execution,” said Wu, who rates the shares “neutral.”Broadening BusinessDell, which is competing in markets for servers, storage, networking and technology services with Hewlett-Packard Co. and Cisco Systems Inc., has used acquisitions of companies such as Perot Systems Corp. to expand in those areas.Felice, 53, joined Dell in 1999. In 2010, Dell moved him from Singapore to its Texas headquarters to manage sales to small-and-midsize businesses, and last year gave him the company’s low-margin consumer PC business. Profit from the consumer arm has improved as Dell has pared back its product line and walked away from price battles with rivals.Bell, 51, may pursue more personal philanthropy, said spokesman David Frink. Bell, who was president of the company’s large enterprise and public-sector units, joined Dell 15 years ago.Frink said Felice wasn’t available for an interview.Dell gained 1.1 percent to $15.34 at the close in New York trading. The shares rose 8 percent last year.--Editors: Niamh Ring, Stephen West
To contact the reporters on this story: Aaron Ricadela in San Francisco at aricadela@bloomberg.net
To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net
Li Tops Hong Kong Rich List as Wealthy Get Poorer, Forbes Says
Jan. 6 (Bloomberg) -- The combined wealth of Hong Kong’s top 40 richest people, led by Li Ka-shing, fell 7.4 percent to $151 billion last year from 2010 as China’s economic growth slowed and property prices dropped, Forbes Magazine said today.
Li, chairman of Cheung Kong (Holdings) Ltd., is Greater China’s richest person, with wealth estimated at $22 billion, 8.3 percent less than last year, Forbes said in a press release. Henderson Land Development Ltd.’s Lee Shau Kee replaced Sun Hung Kai Properties Ltd.’s Kwok family as Hong Kong’s second richest, with a personal fortune estimated at $17 billion, it said.The net worth of Hong Kong’s wealthiest dropped in a year that the city’s benchmark Hang Seng Index fell 20 percent and property prices followed declines in China on a global economic slowdown. Property tycoons dominated the Hong Kong list, with more than one third of the top 40 wealthiest making the bulk of their fortunes from real estate.“The fallout is clear in Hong Kong’s stock market and the new Hong Kong Rich List,” Russell Flannery, a senior editor at Forbes, said in the release. “This year’s list further underscores the deepening involvement of Hong Kong’s real estate industry in the mainland.”Home prices in China fell for a fourth month in December after the government reiterated plans to maintain property curbs, according to SouFun Holdings Ltd. House prices in Hong Kong have fallen to an almost nine-month low, after surging about 70 percent from the beginning of 2009 to June 2011, according to an index compiled by Centaline Property Agency Ltd.China’s economy grew 9.1 percent in the third quarter from a year earlier, the slowest pace since 2009, while Hong Kong’s gross domestic product increased 4.3 percent, the most sluggish pace in seven quarters.Biggest GainerNew World Development Co. Chairman Cheng Yu-tung is the biggest gainer on the Forbes list. His wealth jumped $6 billion to $15 billion after an initial public offering of subsidiary Chow Tai Fook Jewellery Group Ltd. last month, according to Forbes.Cheng was the city’s fourth richest, after Sun Hung Kai Properties’ Thomas Kwok and Raymond Kwok, who have combined wealth of $15.4 billion, Forbes said.SJM Holdings Ltd. Chairman Stanley Ho, who ranked No. 13 a year ago, with net worth $3.1 billion, was removed from the list this year after dividing his assets among family members. SJM Managing Director Angela Leong On Kei, mother of Ho’s youngest children and a beneficiary, debuted on the list with a wealth of $1.6 billion, Forbes said.The minimum net worth to make the city’s 40 richest fell to $950 million from $1 billion a year earlier, Forbes said.--Editors: Stan James, Tan Hwee Ann
To contact the reporters on this story: Stanley James in Hong Kong at sjames8@bloomberg.net; Marco Lui in Hong Kong at mlui11@bloomberg.net
To contact the editor responsible for this story: Stanley James at sjames8@bloomberg.net
Stanley Kwan, Creator of Hang Seng Stock Index, Dies at 86
(Adds comments by former colleague in eighth paragraph.)
Jan. 6 (Bloomberg) -- Stanley Kwan, the banker whose 1969 creation, the Hang Seng Index, became a widely used gauge for the Hong Kong Stock Exchange, has died. He was 86.He died Dec. 31 at Scarborough Grace Hospital in Toronto, according to the website of Toronto’s R.S. Kane Funeral Home. The cause was heart failure, the Toronto Star reported.The Hang Seng Index is “the ultimate capitalist measure of Hong Kong,” Robert Nield, president of the Royal Asiatic Society’s Hong Kong branch, wrote in a foreword to Kwan’s 2008 book, “The Dragon and the Crown: Hong Kong Memoirs.”As a banker at Hang Seng Bank Ltd. from 1962, Kwan saw his creation mirroring the growth pains of Hong Kong, with the index crashing during the 1974 world oil crisis and the 1983 impasse between China and Britain during handover talks, as well as benefiting from the opening up of the mainland. The index’s 48 members now include Industrial & Commercial Bank of China Ltd., the world’s largest lender by market value, and PetroChina Co., Asia’s biggest company by market value.As Kwan told it in his book, the bank’s chairman, Ho Sin Hang, and general manager, Q. W. Lee, decided late in 1969 “that they needed a measure of the performance of the stock market for their own as well as their customers’ reference.” Kwan said Ho spoke of creating the “Dow Jones Industrial Average of Hong Kong.”Setting Base DayAccording to the draft notes for a speech Kwan gave in 2009 in Vancouver, the Hong Kong economy had hit “rock bottom” after riots related to the Cultural Revolution swept the city in 1967. He said some within Hang Seng Bank had questioned the plan for the index as it was “only a small Chinese bank.”Kwan, who headed the bank’s research department, said he led a staff of seven in consulting government and university statisticians and economists.“Stanley was willing to accept opinions and he was good at incorporating different ideas,” said Roger Luk, a former deputy chief executive officer at Hang Seng Bank who worked with Kwan for seven years. “He never gave himself all the credit for founding the Hang Seng Index. He seldom boasted about this achievement.”For the index’s “base day” -- the normal period of trading that other days would be compared with -- Kwan and his group settled on July 31, 1964. The group chose the initial 33 companies that would be the index’s constituent stocks, as well as guidelines for replacing or adding other companies in the future. The Hang Seng Index debuted on Nov. 24, 1969.No Lasting Fame“In the end, the system worked well,” Kwan wrote. “By the time I retired in 1984, the number of companies listed on the Hong Kong Stock Exchange had increased to over 250, but the number of constituent stocks remained 33, and these companies still accounted for about 75 percent of total market value (based on the average for the last 12 months) and over 70 percent of total market turnover (based on the aggregate for the last 24 months).”Kwan, who retired to Canada, said in a December 2010 interview with the Toronto Star that his role in history earned him no lasting fame.“If I walked into the Hang Seng Bank head office today, no one would know me,” he said.Stanley Shih Kuang Kwan was born on Jan. 10, 1925, in Hong Kong to a banking family, according to the funeral home. A survivor of the Japanese occupation of Hong Kong during World War II, he served as a wartime interpreter for U.S. troops on mainland China before starting his banking career.Hired by Hang Seng Bank in part because he spoke both English and Chinese, Kwan was made head of research, according to the 2010 Toronto Star profile.‘Test of Time’“The index he created has stood the test of time,” said Andrew Sullivan, principal sales trader at Piper Jaffray Asia Securities Ltd. in Hong Kong. “It has given a good indication of the performance of the Hong Kong market in general and with a number of changes implemented over the years still does.”After Kwan’s retirement, the index climbed to a high of 16,673.27 on Aug. 7, 1997, before the Asian financial crisis sent it tumbling. The government spent HK$118 billion ($15.2 billion) buying shares in the last two weeks of August 1998, supporting the gauge.The Hang Seng Index also fell to a 4 1/2-year low in April 2003, when the city was swept by an outbreak of the severe acute respiratory disease, an illness brought over by a Chinese visitor, underscoring the city’s increasing ties with the mainland.The index rose to a record 31,638.22 points on Oct. 30, 2007, a year before Lehman Brothers Holdings Inc.’s collapse and the global banking crisis drove equities down. As of yesterday, the gauge was 41 percent below its peak.Kwan’s wife, Wing Kin, predeceased him, according to the funeral home. Survivors include their two daughters.--With assistance from David Wilson in New York, Kana Nishizwa, Lynn Thomasson and Stephanie Tong in Hong Kong. Editors: Steven Gittelson, Stanley James.
To contact the reporter on this story: Laurence Arnold in Washington at larnold4@bloomberg.net.
To contact the editor responsible for this story: Charles W. Stevens at cstevens@bloomberg.net
Albert Foer on Starting the American Antitrust Institute
Illustration by Jimmy Turrell
Thinking like a businessman [in the late ’90s] I found an unfilled niche. There was no one out there to support antitrust as a tool for government policy. I talked to Ralph Nader, who helped me conceptualize and start American Antitrust Institute. After about four or five months, there was no money coming in. I sat down with my family [including his wife, Esther, and sons Joshua, a science journalist, Frank, former editor of The New Republic, and novelist Jonathan Safran] and said, “It looks like I’m going to go back to practicing law.” And they said, “Well, this is something you really want to do. We’re not starving—you’re going to take one year and give it all you can.” Immediately, money started coming in, right when I renewed my commitment to it.
This was the time when the potential of the Internet was just beginning to be exploited. I got my son Joshua—author of Moonwalking with Einstein—who was 14 at the time, to develop a website for me. He’d gone to computer camp a few times. So he wrote my first website and got a Yale education in return. Then we developed an advisory board, which is more than 120 people around the entire world—many of the best and brightest in the field. I fell into a virtual network of experts where I am essentially the hub.
Regarding the possible AT&T and T-Mobile merger [that eventually fell apart in December], we were immediately worried. We saw this merger as reducing the number of significant wireless players from four to three, and quite possibly to two. We felt it would be harmful to consumers because it would reduce competition, give them fewer choices, and in the long run lead to less innovation. It looked to us like a horizontal merger of national proportions.
We developed a very extensive white paper, which took the form of a filing with the FCC, and gave it to the Justice Dept. We wrote op-eds, participated in panel discussions, and otherwise made arguments like any think tank or advocacy group would. So in terms of our impact, it’s very hard to say. I think we helped popularize opposition to the merger. AT&T and T-Mobile were very well represented, and we were trying to even the playing field. — As told to Keenan Mayo
Google's Brain-Busting Job Interview
Quiz: How Dysfunctional Is Your Workplace?
People tell me crazy workplace stories all day long and ask me, “How bad is my situation, compared with other stories you hear?” Sometimes, they’re middle-of-the-road scenarios (your boss and another manager hate each other, and you have to wiggle around the problem without making enemies) and sometimes they’re truly heinous (your boss and another manager hate each other, and your boss told your whole team in a staff meeting to thwart and sabotage people in the rival’s department).
You might be thinking about a job change in 2012 or just asking yourself the age-old workplace question, “Am I crazy, or is working around crazy people just making me feel that way?” Take our quiz to discover whether the level of dysfunction on your job is low, average, or reason for a speedy exit.
1. Ideas: When you have a great idea to share with your boss, your typical first thought is:
a. “How can I pitch this to my boss when he or she will be most open to it, and how can I get the idea put into place once I get the approval?” Good ideas have a high probability of being adopted in your organization, and you generally own any idea you come up with.
b. “I know I’ll have to put together a business case for my proposal, but it’s worth it—it might take a while, but eventually the higher-ups will consider any idea with merit.”
c. “Why bother? My boss will say, ‘That’s not your concern’ or ‘I don’t pay you to think.’”
2. Recognition: When you’ve done a particularly good job on a project or in a customer interaction, you can usually expect:
a. A message or visit from your boss, saying, “Way to go! You were sensational!” and a reflection of your good results when salary-increase time comes around.
b. That the A-plus incident will be logged in your file and will show up in your performance metrics—but don’t expect anyone to do cartwheels about it.
c. No recognition for your success at all; it’s like it never happened.
3. Conflict: When there’s a disturbance in the Force on your team, you can typically look to your managers to:
a. Within a fairly short time (weeks, not months) sit down and hash out whatever isn’t working, maintaining respect for every participant’s point of view and eventually getting resolution.
b. Avoid the problem for a while, but when it has become the elephant in the room, deal with the conflict, inexpertly maybe, but at least they’re talking.
c. React with “What’s that? Conflict on the team? I’m sorry, I can’t hear you. I’m too busy humming my favorite tune, ‘If I Hit This Quarter’s Target, My Bonus Will be Huuuuge.’”
4. Leadership Ethics: When it comes to ethics, one thing I can say about the people who run this organization is:
a. They are ethical. It’s all they talk about, and it’s true: I’ve seen their ethical boundaries tested, and they do the right thing in the clinch.
b. They work at ethics. They offer seminars and have conversations about ethics. Do the top execs do everything they tell the rest of us to do, ethically? I’m not certain.
c. Ethics? This is not a word we use in daily conversation in my workplace, or actually, now that I think about it, ever. The concept itself is foreign at my job. It’s a miracle no one’s been indicted here yet.
5. Teamwork: When I think about my job and the teamwork in my workplace, I conclude:
a. One of the best things about this job is the way people work together and the fact that the state of the team is a standard and productive agenda topic at our staff meetings.
b. They try to do team building, but it feels silly or like lip service. It probably doesn’t help that my manager doesn’t always role-model wonderful team behavior himself.
c. There is no teamwork here, unless stabbing people in the back counts as teamwork. I loathe half my co-workers, and I’m sure it’s mutual.
quinta-feira, 5 de janeiro de 2012
When to Give Someone a Second Chance
“Everyone deserves a second chance.” It’s a sentiment that embodies our deepest hopes: connection, achievement, and salvation.
A former employee recently reminded me how life-changing a second chance can be. I was returning home, seething over late deliveries, belligerent customers, and milk carton managers. Opening my e-mail—and expecting the usual deluge of spam—I received a surprise message from Brett, instead. His awkward opening, in which he gushed about my supposed sales prowess, raised a red flag. Just another guy fishing for a reference, I thought. Indeed, he did want a reference, but Brett did something that disarmed me: He thanked me for standing by him. He even cracked a joke about how he must taken years off my life.
Brett was an intern I hired years ago. He nearly cost me my job. Back then, he was a skinny prankster a semester shy of graduation. On paper, Brett grabbed my attention. He’d recently made the dean’s list and had already managed people. In person, I could relate to him. He was on the cusp of the real world, knotted up, craving something bigger while living in dread of finally leaving the cocoon. Sure, I sensed that he coasted and couldn’t always check his emotions. But corporate life has a way of straining these tendencies. I saw Brett as a younger version of me. The kid had potential. I was going to be Obi-Wan and Brett would be my Padawan learner. I was going to give him an advantage: the mentoring I never received.
My fantasy was quickly shattered. On Brett’s second day, I watched him arrive in a taxi and learned he’d lost his driver’s license due to a DUI conviction. Soon after, the local paper reported that Brett had been sentenced to 30 days in jail for a different incident, an assault. The details of the incident were conflicting—and both parties shared blame. Brett just took it a step too far.
Now everyone looked bad: HR didn’t perform a background check, and I hadn’t pressed his references for negatives. Naturally, Brett wasn’t going to volunteer this type of information. I felt betrayed—and stupid. People were watching and whispering, joking how I finally got what was coming to me. My boss was livid; I looked like an amateur who couldn’t even handle an intern. I knew it would be a long time before my superiors considered me a candidate for our executive team again.
When I confronted Brett, he appealed for another chance. He was afraid of losing his internship and just wanted everything to go away. The actual assault had happened months earlier, and he was trying to turn his life around. Like so many others, he wanted to escape this past and start a new life. I believed him. The authorities would allow Brett to leave jail to go to class and work during the day (maybe they figured working for me was punishment in itself). Against everyone’s wishes, I kept him around. But I wasn’t going to be lenient. Brett had skated through life on charm and talent. Without intervention, his gaps—entitlement, poor self-control, carelessness—would ultimately doom his career and relationships. Maybe he recognized that at night when he looked out from a dark cell. If he hadn’t, he’d certainly learn it in a cubicle.
I made Brett my mission. I expected A work from a B student. And I was in no mood for excuses. He was going to earn his second chance. No, he wasn’t getting a cushy desk job. Instead, I placed Brett in sales, the toughest (and most important) function of any organization. He needed to hear “no” over and over. Every day, I’d monitor and critique his performance. We’d role-play, repeating fundamentals until he could fend off objections and pivot back to the close. When he’d present opportunities, I’d interrogate him until he could deliver prospects’ motivations, expectations, and timelines. Then he’d write a plan on how he’d close those accounts. Brett learned to come prepared—and bring solutions instead of just problems. Sometimes, he’d push back. But I didn’t care if the 22-year-old Brett thought I was a tyrant. I cared how the 36-year-old Brett would look back upon his experience working with me.