Both are great examples of firms operating on the cheap. Either
way the companies are managed inefficiently and employee morale is poor. Many
Business Schools and management gurus preach about how strategic thinking is
the way to efficiency and success these days but what happens when the
strategic thinkers have no clue what is going on.
I see these strategic thinkers as strategizing and planning
to keep their jobs and departments first, without any thought of investors,
staff, and customers. How do investors and staff deal with this management
strategic thinking? An active, intelligent, communicative Board of Directors is
the solution.
Companies and organizations with active Boards who demand accountability
and communication from their management teams are the firms who can manage
strategic thinking with reality. But many times Board members are bankers who
have business with the firm, retired officers who have hired the current
management team, community leaders who barely can run their lives let alone a
corporation, and finally wealthy individuals who are a success because they
have not mismanaged Daddy’s hand me down capital.
Board management and selection should represent all the
stakeholders of a firm: investors, staff, customers, and community. Their
responsibility is the last line of defense to a management style that is
strategically inept and managed for their own interests only.
Happy
Tax Day! Congrats to Adam
Scott on a great Masters victory. Scott won the first green jacket for
Australia in a thrilling two-hole playoff over the ever-classy and impressive
Angel Cabrera. Melbourne Herald Sun headline: "Oh What a Feeling!"
CHINA
GROWTH SLOWS - "China's economy grew 7.7 percent in the
first quarter of 2013 compared to a year earlier, a surprising slowdown that
underlines the challenges facing its new leaders as they try to keep growth on
track while also pursuing deeper economic reforms. ... Most analysts had
expected the economy to have a stronger start to 2013. But a sluggish
manufacturing sector and soft consumption presented headwinds in the first
three months of the year.
"Industrial production grew 9.5 percent, half a
percentage point lower than last year. ... A surge in Chinese credit issuance
at the same time has primed the economy for more investment and, possibly,
faster growth in the second quarter. But it has also stoked worries that
inflation, which has been creeping up already, could accelerate."
TIME TO
REBUILD THE ROADS? - "Roads, bridges and other infrastructure
in the U.S. are steadily growing older and weaker. Given low interest rates and
elevated unemployment, this is an ideal moment to invest in fixing them. ...
From 2000 to 2010, the median human age in the U.S. rose by almost two years,
from 35.3 to 37.2, and the average age of nonresidential corporate fixed assets
increased by about the same amount. Fixed assets as a whole aged from an
average of 20.7 years to 22.1. ...
"Consider the situation in New York State, where about
10 percent of the roughly 22,000 bridges were built before 1930. More than 10
percent of these old bridges have a superstructure rating of poor or worse,
compared with less than 5 percent of the bridges built during the past four
decades."
2016
WATCH - "Hillary Clinton left the State Department nearly
two months ago, but she still needs a staff to keep up with the considerable
business of being Hillary Clinton. A half-dozen people now work for the former
secretary of state and Democratic presidential candidate in a tiny corporate
space on Connecticut Avenue in Washington, in what is called her 'transition office.'
... The Iowa caucuses are at least 33 months away. But that has not dissuaded a
network of former campaign staff members and volunteers from starting a
political action committee, 'Ready for Hillary' ... [A] new report emerges
almost weekly from a Democratic dinner party in New York or Washington that
Important So-and-So heard from Still-More-Important So-and-So that she is
absolutely, positively running ... 'There's this kind of, "I'm telling you
a secret that she told me secretly," but there's no secret to tell,' said
Mrs. Clinton's longtime communications aide, Philippe Reines. 'Everyone's
gotten way ahead of themselves, and most importantly, they have gotten way
ahead of her.' ...
"Mrs. Clinton will turn 69 in 2016 , and she is
described as being uncertain of whether she wants to face yet again the intense
incoming fire ... Still, her closest political allies offer views about why she
is more likely to run than not. ... Next month [she begins] a lucrative public
speaking career ... Mrs. Clinton's 2011 financial disclosure form ... shows Mr.
Clinton making a high of $750,000 for a single speech, although he more
typically receives $150,000 to $300,000. The Clintons reported assets and
income upward of $14 million ... Mrs. Clinton is devoting much of her time to
her next book, about her years in the State Department. She is also debating
how best to continue her work on women's issues, which she could do either
through her husband's foundation or one she may start on her own."
SEINFELD
GENERATES $3.1 BILLION -
"Seinfeld, the comedy television show 'about nothing,' is certainly
good for something. Following its latest round of licensing deals, the sitcom
has generated a total of $3.1bn in syndication income since it was last aired
on NBC in 1998.
"The latest round of deals - the fifth time that the
show has been syndicated - brings total earnings from the show for co-creators
Jerry Seinfeld and Larry David to $400m each. ... The pair have lucrative
profit participation deals with Warner Brothers, which owns the rights to the
program."
WHAT
HOLLYWOOD IS READING - "THE MOST HATED MAN IN HOLLYWOOD: Dish
billionaire Charlie Ergen is accused of running America's worst place to work,
is being sued by all four networks and owns the technology that could destroy
TV's economic future," by Eriq Gardner: "Ergen's Englewood, Co.-based
Dish Network, the nation's third-largest satellite/cable TV provider, a public
company that's grown from a $60,000 startup to an empire with 14 million
subscribers and $14 billion in annual revenue, is the entertainment industry's
Enemy No. 1. With increasing frequency, Ergen has engaged in ugly, high-stakes
games of chicken with Hollywood. In his brutal battle over ballooning carriage
fees with AMC, he dropped 'The Walking Dead' and 'Mad Men' network from the
Dish system for months. ... In January 2012, Dish introduced the proprietary
DVR service that allows consumers to 'AutoHop,' or watch the entire primetime
lineup of the broadcast networks commercial-free without even having to fast-forward
through ads.
"Immediately after its introduction , CBS, NBC, ABC and
Fox filed lawsuits arguing that Dish, if allowed to continue offering the
Hopper, will put them out of business. ... Ergen, who is married with five kids
and has seen his personal net worth swell to an estimated $10.6 billion, making
him 100th on the most recent Forbes list of richest people, expresses
confidence that he will win the legal fight and says it is time that the
broadcasters get on board. 'Some people are averse to change, but the
advertising model is going to change with or without the Hopper,' he recently
told analysts. ... The year before Dish began offering the service for free to
customers, the company lost 166,000 subscribers. Since then, Dish added back
89,000. ... Is Ergen about to get comeuppance for his nasty behavior? Or will
broadcasters bow to what many believe is the inevitable evolution of the ad
business? By year's end, the outcome of the Disney-Dish negotiations could
signal where the industry is headed."
MARKET
WEEK
- "It's tough to make sense of the economy these days. The latest jobs
numbers show hiring is down. Taxes are up, austerity reigns ... and consumers
are skittish. Yet the stock market is defying gravity, marching ever higher in
spite of it all. Behind this seeming riddle lies a confluence of economic
forces that is likely to continue to produce good times for the biggest
American companies - and the stock market - even if growth, as expected, slows
in the coming months.
"By pumping hundreds of billions of dollars a month
into the global economy, central banks like the Federal Reserve and the Bank of
Japan have encouraged investors to put their money into stocks and other
riskier investments, increasing their prices. ... At the same time, American
giants are benefiting from productivity gains and renewed growth in China and
other overseas markets, allowing them to increase profits even if business at
home remains lackluster. ... Investors are also looking farther ahead,
discounting what economists are calling a spring swoon, and focusing on
prospects for healthier growth late this year and into 2014.
DETROIT
IS BACK ... FOR NOW – “The big three Detroit auto makers, Ford, GM
and Chrysler, are setting sales records , and more than holding their own
against European and Asian makers. This time, it's not just because of
subsidies, bailouts, or fleet sales to car rental companies. Consumers are
actually seeking out American cars because they like them and they are built
better. Whether this revival can continue in less favorable conditions is an
open question. And for a variety of reasons, this year is when it will start to
be answered."
TECHWATCH -
"As Web Search Goes Mobile, Apps Chip at Google's Lead, Google remains the
undisputed king of search, with about two-thirds of the market. But the nature
of search is changing ... as more people search ... on their mobile devices.
This has put the $22 billion search industry, perhaps the most lucrative and
influential of online businesses, at its most significant crossroad ... Topical
sites such as Yelp, TripAdvisor or Amazon ... are chipping away at Google's
hold. Google and its competitors are trying to develop the knowledge and
comprehension to answer specific queries, not just point users in the right
direction. ... Larry Page, [Google's] co-founder and chief executive, renamed
the search division 'knowledge.' ... Google now shows answers instead of just
links if you search something like 'March Madness,' 'weather' or even 'my
flight,' in which case it can pull flight information from users' Gmail
accounts."
FIRST
LOOK: SHEILA BAIR SAYS TBTF MAY BE OVER - From former FDIC Chairwoman
Sheila Bair's latest FORTUNE column.: "Is 'too big to fail' over? Believe
it or not, it just might be. ... Under its new Dodd-Frank mandate, the FDIC has
unveiled an innovative strategy to handle a megabank failure. ... In its new
plan, the agency will be able to take control of the holding company - and
become the new owner. As the temporary owner, it will keep the healthy arms
alive in one or more 'good banks,' while putting the megabank's former
shareholder and creditor interests into a government-controlled receivership.
Losses will be fully absorbed by the holding company's shareholders and
unsecured creditors. Taxpayers will not be at risk of loss."
BIRTHDAYS
THIS WEEK – Birthday wishes and thoughts this week to: Ellen
Barkin (58), Miguel Cabrera (30), Roy Clark (80), Ashley Judd (45), Andie
MacDowell (55).
GEORGE
W. BUSH GRANDDAUGHTER - Statement from President Bush, in New York:
"Laura and I are thrilled to announce the birth of our grandchild,
Margaret Laura 'Mila' Hager. Mila, daughter of Jenna and Henry Hager, is named
for her grandmothers. She was born [Saturday] ... at 8:43pm in New York City.
We met our beautiful granddaughter [Sunday]. Jenna and Mila are healthy. And
our family is elated."
COLLEGE
HOCKEY PICK OF THE WEEK – Our College season is over for another year.
We congratulate the Yale University Bulldogs on their National Championship and
a great postseason for the ECAC Conference (9-2). We will return with the College Football
season in late August, until then. Good night now. (Season to date 11-5)
THE
SWAMI’S TOP PICKS: Our
Swami picks have concluded their season and a great season it was 66-38 in our
predictions. The Swami continues to dominate. A new season will begin with the
Stanley Cup Playoffs on April 29.
WORDS
OF THE MONTH –
chuffed
\chuhft\, adjective:
Annoyed; displeased; disgruntled.
“He was
really chuffed about the web site as
well, because the Dean did not inform him about the changes.”
Perder, verb:
To lose; to miss
‘Esta
intentando perder peso.”
“He’s
trying to lose weight.”
DRIVING
THE WEEK - President Barack Obama welcomes NCAA football champion
Alabama Crimson Tide to the White House today ... Gun and immigration bills in
the Senate will dominate most of the D.C. headlines this week (more below) ...
Empire State survey today at 8:30 a.m. EDT expected to drop to 7.0 from 9.2 ...
NAHB Homebuilder Survey at 10 a.m. expected to rise to 45 from 44 ... Consumer
prices at 8:30 a.m. Tuesday expected to be flat on the headline number with
core prices up 0.2 percent ... Housing starts at 8:30 a.m. Tuesday expected to
rise to 930K from 917K ... Initial jobless claims at 8:30 a.m. EDT on Thursday
expected to rise to 350K from 346K ... Philly Fed at 10 a.m. Thursday expected
to rise to 3.0 from 2.0 ... Index of leading indicators at 10 a.m. expected to
rise 0.1 percent ...
House Financial Services has a hearing Tuesday at 2 p.m. on
whether there are still "too big to fail" banks ... House Small
Business Committee has a hearing Wednesday at 1 p.m. on health care reform
implementation ... Goldman Sachs reports earnings Tuesday; Bank of America on
Wednesday; Blackstone and Morgan Stanley on Thursday.
Next week; Dear Rink Rats and spring gardening.
EDITORS’
NOTE – We conclude our third year of our weekly observations. I
thank you for your support and comments, onward to year four.
Until Next Monday, Adios!
Claremont, CA
April 15, 2013
#III-52, 157
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