Thursday, November 20, 2008

Growth stalls -- major reversals in company fortunes

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This very interesting information came from the Harvard Business Review. It is available at: Harvard Business Online - Growth Stalls

Growth stalls -- major reversals in company fortunes as opposed to temporary stumbles -- can hit even the most exemplary organizations. Senior executives rarely see these crises coming. The Corporate Executive Board recently studied the growth patterns of 500 leading corporations, focusing on "stall points." Analysis showed that most companies "accelerate into a stall," experiencing unprecedented progress just before growth rates go into free-fall.

Successful companies lose momentum for four main reasons. All are within management's control if spotted in time. Two tools can help managers avoid growth stalls: a self-test to diagnose impending stalls and a choice of practices to explicitly identify strategic assumptions and test them for ongoing relevance.

This article includes a one-page preview that quickly summarizes the key ideas and provides an overview of how the concepts work in practice along with suggestions for further reading.

An abrupt and lasting drop in revenue growth is a crisis that can strike even the most exemplary organization. The authors' comprehensive analysis of growth in Fortune 100-size companies over the past half century revealed, in fact, that 87% of them had stalled out at least once. The record shows that if management cannot turn a company around within a few years, the odds are that it will never again see healthy top-line growth. Fortunately, the authors (of the Corporate Executive Board) have uncovered and categorized the most common causes of growth stalls. The majority of these standstills are preventable because, according to the authors, they arise from management choices about strategy or organizational design; external factors (e.g., regulatory actions) account for only 13%.

Four categories predominate:

Premium-position captivity. When a firm's world-class offering has won the most demanding customers in the market, it often fails to respond effectively to new, low-cost competitive challenges or shifts in customer valuation of product features.

Innovation management breakdown. Because most large corporations generate sequential product innovations, any systemic inefficiency or dysfunction in the innovation chain can cause extremely serious problems that last for years.

Premature core abandonment
. Managers may conclude too quickly that a core market is saturated. Or they may incorrectly interpret operational impediments in the core business as evidence that it's time to move into new competitive terrain.

Talent bench shortfall. Insufficient capabilities will stop growth dead in its tracks.

They also identified a common culprit in detailed case studies of 50 stalled companies--failure to adapt company strategy to changes in the external environment.

Wednesday, October 15, 2008

Communicating with all generations



If you often have difficulty communicating with your Gen Y kids, imagine the challenges of managing a team of younger workers.

Finding that Baby Boomers are often competitive and focused on material possessions, Tammy Erickson says, "There are very logical reasons for Boomers to love winning. When we were teenagers, we discovered there were too few seats in the school — many of us were sent outside to attend class in trailers behind the building. There were too few sports teams for us all to play, too few college admission letters. The infrastructure was too small for the size of our cohort as we squeezed through the key hole into life. There was only one logical conclusion for Boomers to draw — if life is a never-ending game of musical chairs, you better play to win, and, we have."

"The flipside is that Generation Y are less competitive because they are accustomed to playing on sports teams — even with others who don’t play well. With so many younger employees more interested in having challenge and variety than in "moving up," and so many older employees remaining in the workforce, it is more important now than ever before to understand the wants, needs and preferences of each generation."

In addition to her blog, you can check out the book she co-authored, Workforce Crisis, to better understand this critical reality of everyday.


Friday, October 10, 2008

To advertise or not to advertise - that is the question!


Traditionally most businesses cut back on advertising during economic slowdowns. They see it as an expense rather than an investment. In any slowdown, with a company naturally worried about revenues and expenses, I urge them to look at expenses that are not bringing in the revenue - adjust the thermostat, remove a light bulb or two, change your credit card processer - whatever it takes.

As the total pie of the marketplace shrinks, it is the time to ramp up the marketing/advertising. A company needs to increase its market share now. Get a bigger piece of the pie. This not only helps the current financial situation, it also positions them for when things start turning around. They now have a larger market share of a larger market.

I have had some success stories when my initiatives were followed, but, it is a hard road convincing someone to spend more money when they are concerned about making payroll.
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Wednesday, October 1, 2008

What are your employees doing for over two hours every day??

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People are worried about an impending recession. That has changed their work patterns. According to a study by Leadership IQ employees are wasting 44% more of their time than just one year ago. In February 2007 workers in the study (over 6000) reported wasting 1.6 hours out of a 9.1 hour day. In 2008, these same workers were wasting 2.1 hours out of the 9.2 hour work day.

So what are they doing during these two hours each and every work day that you are paying them?

In February 2007, the Top 5 timewasters were the typical culprits…

Surfing the Internet for Shopping (17% of respondents)
Surfing the Internet for Entertainment (15%)
Surfing the Internet for Personal E-Mail (10%)
Chatting with Co-Workers (9%)
Daydreaming about Positive Topics (9%)

In February 2008, the Top 5 timewasters were

Surfing the Internet for Career Improvement (21% of respondents)
Surfing the Internet for Personal Finance (17%)
Daydreaming about Negative Topics (12%)
Chatting with Co-Workers (9%)
Surfing the Internet for Entertainment (7%)

They are quite different and clearly influenced by fears about a potential recession. Mark Murphy, Chairman of Leadership IQ says, “In times of great anxiety, like an impending recession, people can get stuck in a self-reinforcing cycle where they ruminate about their anxiety which, ironically, only increases their anxiety. And of course, this vicious cycle absolutely destroys their productivity.”

Yet there is a solution to resolve this time wasting. Effective managers that set clear expectations and that communicate, listen, and respond well have more productive workers.

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Saturday, September 27, 2008

Texting while driving is dangerous – DUH!

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According to a report on the BBC website regarding a study by the RAC foundation, average reaction times were 35% slower by texting motorists. The research suggests that texting while driving impairs motorists more so than being under the influence of alcohol or drugs.

A poll of 3000 drivers conducted earlier in 2008 on facebook found that 48% of 18 to 24-year-olds admitted to texting while driving.

The RAC Foundation found average reaction times slowed by 35% when 17 to 24-year-olds drove in a simulator while writing or reading texts. Previous studies had found reactions were 21% slower among those who had taken cannabis and 12% slower among those who had drunk alcohol up to the legal limit. The texters also drifted out of lanes more and had poorer steering control.

The overall driving performance was poor among those tested by the Transport Research Laboratory, which also carried out the previous studies, the RAC Foundation said.


Steering control among drivers in the text test was 91% worse, compared with 35% worse for those under the influence of cannabis.

This is why I like to have my wife in the car with me. I can drive in the commute lane plus she can send/write/read my text messages!
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Wednesday, September 24, 2008

Eat What You Want and Die Like a Man!

Eat What You Want and Die Like a Man!

I saw the quote, thought it was funny and decided to share it with you to start your day with a smile. I then found out it is a book!

I probably will not try all the recipes, but this could be the top ‘White Elephant’ gift for this Christmas season! I have included a link below so you can easily get it.

Tired of tofu? Sick of salad? REVOLT! Eat What You Want and Die Like a Man will put you back in touch with your Inner Hog.

http://www.amazon.com/dp/0806528680/?tag= tomrecommend-20

I can't wait to see who opens this up at Christmas time!!!

Saturday, September 20, 2008

Executive Coaching Fees

The Conference Board has published an update to its survey of executive coaching fees. The executive coaching industry is showing steady growth not just in the US but in Europe and Asia. Rates are the same in Europe as in the US and have risen significantly around the world.

Organizations that coach their top level of executives pay a wide range of fees – anywhere from $200 to more than $500 per hour – with most spending in the higher ranges. The median for 2008 was $425.50 per hour. The most commonly stated fee, however, was over $500 per hour.

The most common billing method is monthly billing. Over 20% of consultants billed half of the fee up front and the balance at the end of the engagement. The most common duration of engagement is 9 months with coaches spending around 4 hours per month with their coachees.

http://www.obcomconsulting.com/pdf/MDL.pdf
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Friday, September 12, 2008

Confusion Over Drug Names a Prescription for Danger

Confusion Over Drug Names a Prescription for Danger

Associated Press September 3, 2008

I got this from the associated press and feel it is important to share just as i have it in order to get the word out.

"Do you take the generic drug clonidine for high blood pressure? Double-check that you didn’t leave the drugstore with Klonopin for seizures, or the gout medicine colchicine.

Mixing up drug names because they look or sound alike, like this trio, is among the most common types of medical mistakes, and it can be deadly. Now, new efforts are aiming to stem the confusion and make patients more aware of the risk.

Nearly 1,500 commonly used drugs have names so similar to at least one other medication that they’ve already caused mix-ups, says a major study by the U.S. Pharmacopeia, which helps set drug standards and promote patient safety.

Last week, the influential group opened a web-based tool to let consumers and doctors easily check if they’re using or prescribing any of these error-prone drugs, and what they might confuse it with. Try to spell or pronounce a few on the site (www.usp.org), and it’s easy to see how mistakes can happen. Did you mean the painkiller Celebrex or the antidepressant Celexa?

Due out later this fall is a more patient-oriented website, a partnership of the nonprofit Institute for Safe Medication Practices and online health service iGuard.org, that will send users e-mail alerts about drug-name confusion.
And the Food and Drug Administration, which currently rejects more than a third of proposed names for new drugs because they’re too similar to old ones, is preparing a pilot program that would shift more responsibility to manufacturers to guard against name confusion. The goal is to spell out how to better test for potential mix-ups before companies seek approval to sell their products.
“There are so many new drugs approved each year, this problem can only get worse,” warns USP vice president Diane Cousins. An estimated 1.5 million Americans are harmed each year from a variety of medication errors, and name mix-ups are blamed for a quarter of them.

Rarely does a company change a drug’s name after it hits the market, although it’s happened twice since 2005. The Alzheimer’s drug Reminyl now is named Razadyne, after mix-ups with the old diabetes drug Amaryl, including two reported deaths. The cholesterol pill Omacor is now named Lovaza, after mix-ups with blood-clotting Amicar.

Doctors’ notoriously bad handwriting isn’t the only culprit. A hurried pharmacist faced with alphabetized bottles on a shelf might grab the wrong one. And computerized prescriptions aren’t a panacea.

A doctor who e-prescribes still can click the wrong row on the alphabetized screen, picking the bone drug Actonel instead of the diabetes drug Actos. Phone or fax a prescription, and static or smudged ink can turn the epilepsy drug Lamictal into the antifungal pill Lamisil.

Harder to measure but perhaps more common: A doctor means to prescribe a new drug but spells out a similar-sounding old one out of habit. Or the patient misspells or mispronounces one of his drugs, and a health worker assumes it’s the schizophrenia drug Zyprexa, not the antihistamine Zyrtec.

Enter the new web tool. Cousins advises consumers to check it against their current medications, so they know to pay more attention to confusing ones at refill time."

Monday, August 11, 2008

Behind the Bust

Michael Fitzgerald wrote this and I liked it. Tell me your thoughts on this...just add a comment.

"Is Wall Street’s manage-to-the-numbers approach the reason we’re in the economic mess we’re in?

That’s the argument of
Gresham’s Law and the Shaky Nature of Today’s Business Ethics on the Slow Leadership blog. Gresham’s Law, it tells us, is a 16th century maxim that ‘bad’ money (with not enough precious metal) will replace good (actual gold or silver) money.

This post argues that the relentless need to make the quarterly numbers and make Wall Street happy has created a Gresham’s Law of bad business ethics that is causing the current wave of economic problems here in America.

Here’s the crux of the argument:
…trouble starts when it gets tough to keep on exceeding Wall Street estimates every quarter. Faced with slowing growth, management first jumps into constant cost-cutting. When the benefit of that runs out, it focuses even harder on what seems to matter most: ‘making the numbers’. Everything else is pushed aside. Anyone who makes the numbers is praised as a hero, no matter how it’s done. Sharp management practice is accorded exactly the same value as any other approach.

It’s typically far easier to produce the required numbers by cheating than by the ‘good coinage’ of sound, ethical management. But since the numbers are all that matter, the extra effort and time needed for doing things right doesn’t seem worth it. ‘Bad money’ — creative accounting, manipulation of figures, concealed risks and other marginal or outright dishonest practices — quickly drives out good.

Perhaps Sarbanes-Oxley was just a prank played on gullible shareholders by a cunning and cruel set of government and corporate officials. Perhaps securitized mortgages were a bad joke amongst bankers that backfired. Perhaps not. As angry as it makes me to hear the bailout drumbeat around failing financial firms and lenders, I think Slow Leader goes too far. Wall Street does have a short-term focus, but many companies seem able to manage without resorting to the kinds of chicanery described here. Sure, there were bad apples, not just greedheads, but mostly it looks to me like people made terrible risk assessments."

Tuesday, July 29, 2008

The economy

The economy. Most of us are tired of hearing about it. We know that things have previously been better here in the good ol’ United States. The June inflation rate was 5%, the highest since 1990 or 1991. We all love going to buy gas these days!!

Let’s put it in perspective, though. I want to use my rose colored glasses for a moment. From 1973 until 1982 our inflation rate was never below 6 percent with many years in double digits! (OK, 1976 was 5.75%)

Suppose you live in Zimbabwe. Annual inflation rose in May to 1,063,572 percent! That’s right – over 1 MILLION percent inflation. I read that in July it is up to 2.2 million percent!! A loaf of bread now cost what 12 new cars did a decade ago. A small pack of locally produced coffee beans now costs close to 1 billion Zimbabwe dollars – the price of 60 new cars a decade ago. That’s for a small pack of coffee beans!!! Economic analysts say unless the rate of inflation is slowed, annual inflation will likely reach about 5 million percent by October.

Manufacturing industries, now running at below 30 percent of their capacity, are reporting growing absenteeism by workers facing soaring commuter bus fares. They can't afford to get to work to earn a paycheck!

With inflation soaring, you need a wheelbarrow to haul around enough cash to buy groceries! The Zimbabwe government is trying to help out. They just introduced a 100 billion dollar bank note! You read that correctly – a 100,000,000,000 dollar bill.

Imagine how hard it is to design currency with 11 zeros on it. Or worse… 1923 Germany -15 digits and 1946 Hungary with 19 digits.

I don’t really like it, but I think I can live with 5% for a little while.

As England’s previous Prime Minister Tony Blair said, referring to the United States, "A simple way to take measure of a country is to look at how many want in... And how many want out."

Tuesday, July 22, 2008

Who are the best?

Who are the best baseball players in the U.S.? Who are the best basketball players in the U.S.? Who are the best Pommel Horse athletes in the World? The best grade school kids? Junior high students? College students? Professional athletes? Businesses?

What do they all have in common? They all have coaches - professional sports coaches, Olympic coaches, college coaches, teachers, professors, and mentors. They were coached all along the way. They got better and better from the instruction of their coaches.

What is a business coach and how does coaching apply to your business?

Several definitions of a coach include: A coach is one who instructs or trains; a coach prompts, directs and trains by demonstration and instruction; coaching is partnering with clients to inspire them to maximize their personal and professional potential.

Coaching is a method of directing, instructing and training a person or group of people, with the aim to achieve a goal or develop specific skills. There are many ways to coach, types of coaching and methods to coaching. Training may include seminars, workshops, one-on-one interaction, and supervised practice.


As consultants we are also coaches. We first uncover the goals, challenges, shortcomings, and misalignments within the business. We then formulate our coaching strategy to get the business to where it needs and wants to be. We then implement that strategy to insure our client’s improvement. That improvement can be increased profit and efficiency; or it can be more time to spend with your family. We consult with the business and coach the people.

In addition to our business coaching, we also have our “Masters Degree In Life” program of personal and professional coaching.


Is 2008-09 really the time to bring in a coach?

An Economist Intelligence Unit (EIU) survey of 600 business leaders shows that more than half of companies plan to engage in more change programs and increase spending on each in the coming year. “The focus is on increasing efficiency in companies, reminiscent of many of the change initiatives of the early 1980's.”


With a slowdown in the economy it becomes even more critical to be efficient, productive and profitable. That also positions a company better for when the economy heats up later. The result is invariably a greater market share for those who invest in these initiatives now as other companies don’t invest during the slow economy period. So, yes, now is the time.

If you have any questions or comments, please contact me.

Monday, July 14, 2008

Another One Bites the Dust!

But what about the Clydesdales??

Another American company is swallowed up in an International buyout. Another beer company this time – an American institution, no less. Quoting from an article in the Economist…

Anheuser-Busch was attempting to rebuff an assault by its Belgian-Brazilian rival, which had offered $46 billion in an unsolicited bid on June 11th. Anheuser-Busch tried to use the business equivalent of a bar stool over the head—a lawsuit claiming that InBev had misled investors. The American firm even dealt the low blow of citing InBev’s Cuban businesses as a reason to reject the bid.

These tactics came to nothing, however, after InBev opened its wallet and upped the offer to $52 billion, which Anheuser-Busch gratefully accepted on Sunday July 13th. In fact InBev had been prepared to fight sneaky too. In an effort to outflank the founding Busch family (which currently owns only 4% of the company’s shares) it used family disagreement. The bidders proposed a new board of directors that would include Aldolphus Busch, the uncle of August Busch, the existing chief executive of the American firm who was dead against the merger. Adolphus promptly urged Anheuser-Busch to accept InBev’s offer.

Anheuser-Busch had come up with its own cost-cutting plan to counter the offer from InBev. But that was no match for Inbev’s hard cash, particularly after it agreed to raise its offer to $70 a share. Agreeing to the deal at this price is probably a better outcome than dealing with a long and distracting hostile bid. The deal is a good one for many reasons.

Mature market brewers such as Anheuser-Busch, can be fantastically profitable, even if growth is negligible and handy targets are in ever shorter supply. In emerging markets demand is volatile and margins are slim. Growth in beer drinking in these new markets has suffered as food prices have spiralled. The rising prices of beer’s main ingredients (barley for the drink, aluminium for cans) have cut margins slimmer.

InBev, by buying Anheuser-Busch, will insulate itself against the volatility of emerging markets—over a half of its profits come from its Latin American operations. Although there is little overlap with operations in America Anheuser is generally reckoned to be ripe for some cost cutting. Although InBev pledged that no brewery closures would take place, it wants to make savings of $1.5 billion by 2011, which suggests some workers will go. InBev reputation for ruthless efficiency could also mean that Anheuser-Busch’s famous Clydesdale horses are put out to pasture.

The merger of the world’s number two and number three brewers by volume will create a combined company with more than $36 billion in annual revenues and a better negotiating position with suppliers of expensive ingredients. The two will also gain extra traction in China with their combined operations. The beer market there is enticing because of rapid growth, but it is also highly fragmented and hard for big western brewers to crack.


Friday, June 13, 2008

Is 2008 really the time to bring in a consultant?


An Economist Intelligence Unit (EIU) survey of 600 business leaders shows that more than half of companies plan to engage in more change programs and increase spending on each in the coming year. “The focus is on increasing efficiency in companies, reminiscent of many of the change initiatives of the early 1980's. Over the coming year, companies will replace the current emphasis on cost reduction with an emphasis on adaptability and organizational efficiency.”

This should be good news for consulting companies like OBCOM Consulting who’s greatest talent is finding underperforming resources, hidden possibilities, and overlooked assets. Because of our customized solution concept, we stay around for the effective implementation of the change initiatives we recommend. This alleviates the disturbingly low success rate of change initiatives companies have possibly experienced in the past.


EIU reports that, "the element of change management that companies have the most difficulty with is 'winning hearts and minds' (51%). This was followed, in second place, by 'lack of management buy-in' (31%)." Blame for failure seems to largely fall on communication, intent and people rather than money or technology.

With a slowdown in the economy it becomes even more critical to be efficient, productive and profitable. It also positions a company better for when the economy heads up later. The result is invariably a greater market share as other companies don’t invest during the slow economy period.

Wednesday, June 11, 2008

How to Manage Price Inflation

Oil futures went up a historic 9 percent on June 6th. You and your customers will continue to see the effect every time you hit the gas pump. Your customers will be more concerned than ever before about prices. You are concerned about prices for the goods you buy and the ones you sell.

What can you do to manage your business through the deepening economic challenge that we are facing?

According to John Quelch, a professor at Harvard Business School, there are seven things to keep in mind.

1. Understand Your Customers. What are they doing as prices rise?


2. Invest in Market Research. You must get out into the marketplace yourself and talk to consumers directly to understand their pain points and how they are changing attitudes and behaviors in response to price inflation.

3. Redefine Value. To motivate cash-poor consumers, marketers must reverse engineer products and packaging to hit key retail price points. This may mean downsizing package sizes, something the candy industry always does in response to inflation.

4. Use Promotions. More customers than usual will be looking out for price promotions, but don’t give away the store to those who don’t need the discount, and cut prices not across the board but only on items selected as your inflation-busters.

5. Unbundle. Customers who previously welcomed the convenience of buying product, options, and services rolled into one may now ask for a detailed price breakdown. Make it easy for your more price-sensitive customers to better cherry-pick the options and services that they truly need by giving them an unbundled menu of options.

6. Monitor Trade Terms. Manage your inventory on a last-in, first-out basis to insure that increases in your realized selling prices do not trail the increases in your input costs.

7. Increase Relevance. You need to persuade customers to cut back their expenditures on other products, not on yours. Strong brands can hold consumer loyalty while increasing retail price points. Weaker brands risk private label and generic substitution.


During this challenging time you need to educate your customers and give them some pricing options. And remember to emphasize your product’s benefits.

Thursday, June 5, 2008

Can money buy you happiness?

According to an article I found in the Harvard Business School website the answer is YES! What happened to the old adage that money can’t buy happiness?

Michael Norton, from the HBS, and two colleagues from the University of British Columbia found that giving other people as little as $5 can make the giver happier. It is interesting that spending the money on someone else can make us happy.

"Intentional activities—practices in which people actively and effortfully choose to engage—may represent a promising route to lasting happiness. Supporting this premise, our work demonstrates that how people choose to spend their money is at least as important as how much money they make," the researchers explain. "Our findings suggest that very minor alterations in spending allocations—as little as $5 in our final study—may be sufficient to produce non-trivial gains in happiness on a given day."

There were three studies involved. Norton explained, “One of the most puzzling paradoxes in social science is that though people spend so much of their time trying to make more money, having more money doesn't seem to make them that much happier. My colleagues Liz Dunn and Lara Aknin—both at the University of British Columbia—and I wondered if the issue was not that money couldn't buy happiness but that people simply weren't spending it in the right way to make themselves happier.”

They showed that spending as little as $5 over the course of a day on another person led to demonstrable increases in happiness.

They are now looking to work with companies to be creative with how they encourage their employees to spend their bonuses, and companies that are willing to be creative in how they engage in their own charitable giving. “For instance, many companies donate a lump sum to charities each year. Our research suggests that companies might think about splitting that money up among their employees and empowering them to choose the recipient of those donations. We refer to such initiatives as creating a "prosocial workplace," which we believe has benefits both for companies, in the form of happier employees, and for society, through increases in charitable giving.”

Tuesday, June 3, 2008

A MUST READ Book

I have read many books by and about John Wooden and I met the man once (thanks Daniel Herrmann).

I just finished reading The Essential Wooden.

This is one of the best books I have ever read. It had me thinking and reflecting about places I have worked, people I have worked for, businesses I have worked with, and mistakes I made with people that worked for me.

I highly recommend that you get and read this book. The challenge I make to you is to try to apply his thoughts, approaches, character, and techniques to your life and business. Think of each nugget not in basketball terms, but in terms of how you can apply it to your life - how you can ‘Connect the Dots’ to your life. Greater ‘success’ will be yours.

If you read only a page or two a day, it will be like getting a couple longer ‘thoughts for the day’ each of those days. The format is such that you can read a page or so and not having to worry about where you left off for when you pick it up again.

I even made it easy for you to find it!!!


http://www.amazon.com/dp/0071484353/?tag=obcomconsulti-20

Let me know what you think after you read it.

Wednesday, May 28, 2008

Buzzzzz

Buzzwords. They drive us all crazy. We all use them. As always, I am multi-tasking. However, I am trying to not be transparent as I am fully engaged in this window of opportunity to present to you the best of breed of buzzwords. See the article of a couple weeks ago in the Public Relations Society of America’s web site on buzzwords - http://www.prsa.org/supportfiles/news/viewNews.cfm?pNewsID=842347345 .

Then, after the first 15 minutes of your next important meeting, shout out “Bingo!”

Got any new ones to add to the list?

Sunday, May 25, 2008

Memorial Day

Tomorrow is Memorial Day. This is a traditional day to commemorate U.S. men and women who perished while in military service to their country. Many people observe this holiday by visiting cemeteries and memorials. A national moment of remembrance takes place at 3 p.m. US Eastern time. Another tradition is to fly the U.S. flag at half-staff from dawn until noon local time. Volunteers usually place an American flag upon each grave site located in a National Cemetery.

Most, if not all, of my Uncles were in the military service. One of my aunts was in the service. Most of my male cousins were in the service. I was in the Navy. It is humbling to be in the service of your country. I can't say that I looked forward to the day I would join the military. However, in hindsight, I learned a lot and a lot about myself during those times. I also learned to respect my country and respect those that gave so much more that I to preserve our liberty.

One goal I have in my life is to visit the Vietnam Memorial in Washington, D.C. It is something that I want to do but that I also do not want to do. I want to do it but I know it will be hard and emotional. I have friends whose names are on that wall.

Wednesday, May 21, 2008

Biofuels - the real deal???

As I was getting my haircut today I was reading the June 2008 issue of Road and Track magazine. There is an interesting article on biofuels. Remembering a discussion I had with someone last Friday, I am forwarding some quotes for you.

Today we have finished motor gasoline that “includes 10-percent ethanol already blended in as an extender in roughly half the country. These days, “oxygenates” as in this E10 are solely extenders. With today’s oxygen-sensed engines, there’s no omissions benefit, and in fact there’s degradation in fuel economy and an increase in evaporative emissions.”

“note that about 16 percent of our gasoline today is traceable to Persian Gulf sources.”

“40 percent of our crude is coming from OPEC today.”

“To many, the downsides of corn ethanol are already apparent. There's the matter of fuel versus food, with corn prices almost tripling in the last two years. Ethanol pro­ponents note that only 5 percent of our corn crop is for direct human consump­tion; some 65 percent of it is devoted to livestock. Others ask: But then who eats the livestock?”

“Distribution issues complicate wide­spread biofuel adoption. Because of its hygroscopic nature (ethanol readily soaks up water), it cannot be transported through petroleum pipelines. It must travel from its Midwest production facilities by rail or, at even higher cost, by truck. Thus, estab­lishment of a national E85 network hasn't been particularly straightforward. It's only as I write this that the Los Angeles sprawl gets its first E85 station”

“E85 contains only about 70 percent of the energy content of gasoline. Thus, as verified in the EPA Fuel Economy Guide, a flex-fuel car takes a sig­nificant hit in its mpg when running E85. Today's E85 price at the pump is around 80 percent that of regular gasoline. But with its mpg deficit factored in, its effec­tive price lies between those of middle and premium gasoline grades.”

“Biofuel production is complex. The feedstock must be gathered and concen­trated (a nontrivial matter, as it's dispersed and not very dense). Whatever the process, it requires a lot of water. There's lots of waste, albeit much of it with other uses. The choice of feedstock is a key issue. If it's corn, only the starch is used. Transformed into sugars, these are then fermented. Last, the result is distilled to produce ethanol.
Some say we barely have enough corn to support near-term Renewable Fuels Standard(RFS) goals, let alone those set for 2015 and beyond. What's more, increasing corn production has trade­offs of water use, pesticide runoff and in­herent risks of a monoculture.”

“For example, researchers have looked at greenhouse-gas emissions and total en­vironmental impact of a variety of biofuel sources. A goodly number - U.S. corn, Brazilian sugar cane, Malaysian palm oil­ - were shown to have greater environmental detriment than gasoline. By contrast, feed­stocks of basic cellulosic nature, things like wood chips, grass, even household garbage, hold promise.”

So, remember to not throw the baby out with the bath water. Hang on to that gas guzzler for awhile longer. I have what most people refer to as a ‘high performance vehicle’ yet I can set the cruise control at 80 mph and still get 28 mpg! And if I need to go faster, I can just ‘punch it’ and have a really good time.

Actually, now that I think of it, my car is a HYBRID – it burns gas and rubber.

Monday, May 19, 2008

Corporate news items.

General Electric is thinking about selling its appliances division, which has been supplying homes with refrigerators, air conditioners and the like for decades. The conglomerate is under pressure to improve returns to shareholders and the division is now a relatively small part of its business.

Freddie Mac, a government-backed housing-finance company, posted its third consecutive quarterly loss and unveiled a plan to raise $5.5 billion in new capital.

Circuit City is finally throwing in the towel. Confronted with weak sales, impatient shareholders, and a U.S. consumer pummeled by recession, the electronics chain capitulated on May 9 and retained Goldman Sachs to help negotiate a deal.

The moves almost certainly presage a sale of the chain, likely to Blockbuster, where Carl Icahn has stepped up and agreed to finance a Circuit City acquisition. The billionaire—Blockbuster's largest shareholder—has bought into a "game-changing" scheme announced last month in which the troubled electronics retailer would be combined with the troubled movie retailer to create a new national chain selling consumer hardware and software.

Hewlett-Packard launched its biggest acquisition since its 2002 takeover of Compaq, when it agreed to buy Electronic Data Systems. The deal is valued at $13.9 billion. HP hopes its new purchase will enable it to compete better with IBM in a broad range of computer services.

Apple. “In the March quarter, Mac sales blew away all forecasts, soaring 51% over the previous year, or more than three times the rate for the personal-computer industry. Throw in the iPod and iPhone, and Apple's total sales have surged from $5.2 billion in fiscal 2002 to $24 billion last year. Its share price has risen 2,300% over the past five years, giving the company a market capitalization, at $154 billion, that tops those of tech giants Hewlett-Packard , Dell, and Intel.

Millions of consumers are seeing the Mac in a new light. Once an object of devotion for students and artists, the Mac is becoming the first choice of many. Surging demand for the machines led Apple to predict revenues will rise 33% in the second quarter, to $7.2 billion, even in the face of an economic slowdown.”

Thursday, May 15, 2008

Credit cards and Airlines...

Airlines have been encouraging customers to pay for tickets using various means beyond credit cards. They are doing this partly to reduce their high credit card processing costs.

This move happens to come as Americans are more often using debit cards and other direct-withdrawal payment methods.

But don’t use these other methods for airplane tickets. Under the federal Fair Credit Billing Act, a credit card company is required to return your money for a service not supplied, like an airplane trip. Debit payment agencies are not.

In recent weeks, some travelers on airlines like Skybus, ATA, Aloha and others have had to scramble for refunds when those airlines abruptly stopped flying. In general, it is a bad idea to pay for an airline ticket with anything but a credit card, Mr. Brancatelli, the publisher of the subscription business travel site Joesentme.com said, because resolving disputes is easier with a credit card company in your corner.

But worse, he said, “If your airline goes belly up and you paid with a debit card, you go to the back of the bankruptcy line with all the other unsecured creditors.”

Related airlines/credit card news. Frontier Airlines on Friday, April 11th, became the latest budget carrier to file for bankruptcy protection, but the airline promised to continue normal operations.

Frontier, based in Denver, said it had filed for protection after its main credit card processor tried to hold back substantial proceeds from its ticket sales. But the airline said it would continue to operate its full schedule of flights and honor ticket reservations.
Sean Menke, Frontier president and chief executive, in a statement said, “We felt that Frontier would be able to withstand the challenges confronting the U.S. airline industry, which include unprecedented and significant increases in the cost of jet fuel and the impact of the credit crisis in the financial markets, without seeking bankruptcy protection.”

“Unfortunately, our principal credit card processor, very recently and unexpectedly informed us that, beginning on April 11, it intended to start withholding significant proceeds received from the sale of Frontier tickets,” he said. “This change in established practices would have represented a material change to our cash forecasts and business plan. Unchecked, it would have put severe restraints on Frontier’s liquidity and would have made it impossible for us to continue normal operations.”

In its court petition, Frontier said that the credit card processor, the First Data Corporation, had notified the airline that it was increasing the amount of collateral it required to $130 million from $54.5 million and that it would retain 50 percent of the airline’s bank card sales.

Wednesday, May 14, 2008

Going Local.

Many retailers are reversing on a trend of having ‘cookie cutter’ stores throughout the country. Retail giants like Gap, Best Buy and Wal-Mart once prospered by opening identical stores around the country.

Macy’s is now joining the ranks of those who are ‘localizing’ their retail stores. They are adopting an approach that Ross and Best Buy have come to view as imperative as consumers are demanding more individualized selections. "With almost everything now available on the Internet, retailers need to give shoppers a reason to make the trip.

Best Buy began customizing the format, selection and service at its 600 U.S. stores four years ago, rather than pushing a uniform mix of merchandise. The electronics chain, which has since grown to 935 U.S. stores, began by identifying customer types and then determined store by store which customers were most important. Ross, a discount-apparel chain, intends to begin tailoring 15% of the merchandise categories in each of its more than 900 stores, starting this fall.

Department stores like Macy's also face increasing competition from fast-fashion retailers, such as Swedish clothier Hennes & Mauritz AB, known as H&M, and Inditex SA's Zara in the U.S., which track precisely what is selling in each store, down to the size, and stock them accordingly.

A localization strategy can boost sales at stores open at least a year by 1 to 3 percentage points -- and just 10% to 15% of inventory needs to be customized to get as much as 90% of the benefit, says Darrell Rigby, a Bain & Co. partner.

For more information see the article by Vanessa O’Connell of the Wall Street Journal that appeared in a myriad of online magazines.

Monday, May 12, 2008

Office Environment

For years researchers have said that a businesses’ physical workspace affects productivity, job satisfaction and profitability. Duh! It is a good thing we had researchers tell us that. But few companies actually make the change to getting rid of cube farms, adding natural light and adding larger common areas. Today’s work style of collaboration and flexible teams is hindered by the old cubicles-and-conference-rooms format.

Most of us would like to get our hands on Bob Propst, of furniture designer Herman Miller, who introduced the first office cubicle in 1968. But then where would that leave Scott Adams the creator of Dilbert? He would still be with Pacific Bell in an office somewhere in the East Bay of Northern California. Dilbert designed his own ultimate cubicle - http://www.ideo.com/dilbert/index.htm. I am most fond of page 5.

What are some of the latest ideas and trends for today’s office environment?

It needs to be adaptable and collaborative. Cubicle walls need to be lowered to foster communication. Traditional cubes are too isolating, but the “open desk” system that grew popular proved to be too noisy. Companies can simply lower cube walls from six feet to four feet thereby affording privacy and visibility. Lower them and add some glass on top to allow light to pass through the room. And, studies show that passersby will speak more quietly if they make eye contact with employees in cubicles.

Natural light! Executives today spend a lot of time travelling and in meetings. Move the hard-wall or private offices to the interior of the building. Worker bees who sit at their desks all day are at the windows. With the open spaces created by lowered cubicle walls, the natural light will permeate the entire floor. In addition to a better physical environment, better worker productivity and retention, this will also lower heating and cooling costs.

Desks for visiting staff. Executives and others who visit different divisions of the company need open space desks with the capability to make phone calls, check e-mail, print, copy, scan and spread out the paperwork.

Sliding glass doors. Textured doors provide privacy for workers and also let the light circulate. They also don’t require the ‘swing space’ of a regular door.

Write-on/wipe-off walls and glass surfaces may be written on with write-on/wipe-off markers for instant brainstorming.

Paint. A study indicated that the old off-white paint makes employees "feel tired and directionless." The right paint color choices in the workplace can improve employee attitudes, increase productivity, and even reduce the number of sick days employees use. Use it as a unifying element of a company's brand identity. This also reinforces the brand to clients and others who visit your offices. It is relatively inexpensive and very effective.

Other Trends: standing meeting rooms (where the absence of chairs produces shorter meetings), open workplace dividers with built-in shelving and glass windows, and in-floor electrical outlets that allow for the easy reconfiguration of space.

Things to look for: Do employees bring lamps from home to avoid harsh fluorescent lighting? Do employees spend a lot of time in transit to meeting rooms, printers, copiers, and fax machines? Study whether the layout of the building is helping or hindering employees to get work done. Is an area always empty? Is an area overcrowded? Are workers competing for certain furnishings or equipment and not using others?

If employee retention and productivity, lower heating and cooling costs, increased job satisfaction and increased profitability are on your list of desired goals, then improvement of your businesses’ physical environment may help get you there.

Friday, May 9, 2008

It’s not all bad news out there…

IBM's first quarter net income surged 26 percent, IBM's revenue from the US is roughly 35 percent of its total, which has positioned the company well in the current economic environment.

Infosys reported a 10 percent rise in profit and Satyam had an 18 percent rise in quarterly profit.

AMN Healthcare Services Inc., a San Diego health care staffing firm, reported first-quarter net income of $9.5 million on May 7, up 16 percent from the like quarter in 2007. Revenue for the first quarter was $283.9 million, 3 percent above the revenue reported in last year’s first quarter. The public company saw growth in all three of its business segments — nurse, physician and allied health staffing — as well as improved profit margins. AMN Healthcare reaffirmed its forecasted revenue growth this year at 7 percent to 12 percent above 2007 results, with earnings to increase at a faster rate.


EDS posted a 62 percent plunge in first quarter profits, but new contract signings in the same period rose to $5.6 billion, up 66 percent from the same time last year. The news pushed EDS shares up by 4.77 percent for the year to date.

Ford - The Board of Directors of Ford Motor Company today recommended that its stockholders take no action at this time in response to the announcement by Tracinda Corporation that it has commenced a tender offer to acquire up to 20 million shares of Ford’s common stock at a price of U.S. $8.50 per share. The company’s Board said it will review and consider Tracinda’s offer and will advise stockholders of the Board’s position regarding the offer by May 22, 2008, as required under applicable securities law.

CISCO Systems, which makes networking equipment, met its own lowered quarterly sales target on Tuesday while beating analysts’ earnings forecast by 2 cents a share.
Cisco, based in San Jose, Calif., said revenue increased 10 percent, to $9.8 billion, from $8.9 billion, for its fiscal third quarter, ended April 26. Analysts had forecast revenue of $9.75 billion. Cisco’s earnings rose to 38 cents a share, from 34 cents a share in the quarter a year earlier. The company’s profit in the third quarter declined to $1.8 billion, or 29 cents a share, from $1.9 billion, or 30 cents a share. The figures included a 4 cents-a-share charge related to an acquisition during the quarter.
There were fears that the difficult economic climate in the United States might have hurt Cisco’s earnings during the quarter.

AT&T Inc. (NYSE:T) reported strong first-quarter results. This marked AT&T's 12th consecutive quarter of double-digit growth in adjusted earnings per share. $0.57 reported earnings per diluted share, up 26.7 percent versus $0.45 in the year-earlier first quarter. $30.7 billion in consolidated revenues, up 6.1 percent versus reported results for the year-earlier first quarter. "We delivered an excellent first quarter and a solid start to the year," said Randall Stephenson, AT&T chairman and chief executive officer. "Revenue growth continues to ramp, we have good momentum across key growth areas, major cost initiatives are on track, and our operational results reinforce the confidence we have in our outlook.”

Thursday, May 8, 2008

Theme Parks – Cars/trucks – Movie makers

Disney's quarterly net income rose by 22% compared with a year ago. Despite the economic slowdown, the company recorded brisk trade at its theme parks and resorts, where revenue increased by 11%. The weak dollar was said to help, by making it more expensive for Americans to travel abroad and cheaper for foreigners to visit the parks.

Toyota said it expects to see earnings tumble 27% in the fiscal year ending March 2009. Toyota said the strong yen and weaker U.S. sales took a bite out of January-March earnings and projected worse was to come — a 27 percent plunge in its full-year profit.

An ill-timed bet on the U.S. truck and SUV market contributed to a 28% decline in Toyota Motor Corp.'s net profit for the fiscal first quarter. The Japanese auto giant expanded its truck manufacturing capacity in the U.S. just before a dramatic shift in American tastes away from trucks and sports-utility vehicles to small cars. A $1 billion Texas truck plant that Toyota opened in 2006 is operating well below capacity and eating into margins on the Tundra, a new full-size pickup.

"We are facing a severe business environment. However, Toyota considers this headwind as a valuable opportunity to turn into a more flexible and stronger company," Toyota President Katsuaki Watanabe said.

Toyota, which last saw its profit fall on an annual basis seven years ago, is facing a deep slump in U.S. sales. The company is benefiting from higher sales of small cars, such as the Yaris and Prius, but smaller cars are less profitable.


Business Week reports that Iron Man, the blockbuster superhero movie, starring Robert Downey Jr. as an industrialist who fights terrorists and arms dealers in a red-and-yellow metal suit, pulled off a $100 million-plus opening weekend

Marvel took $150 million from its film fund to make Iron Man and is paying Paramount Pictures (VIA) 10% of net revenues from ticket and video sales on top of its fees for marketing and distribution. Still, Iron Man could generate $1 billion in box-office, home-video, and other sales. And profits (less expenses) could be nearly $200 million, projects analyst Alan S. Gould of brokerage house Natisix Bleichroeder.
Previously, Marvel has licensed Spider-Man and X-Men, among other characters, to studios for about 5% of the box-office take. Marvel also shared the films' lucrative merchandise revenues. This meant that Marvel left a lot of money on the table when it let Sony Pictures produce the Spider-Man movies. With Iron Man and other self-produced films, Marvel will rake in most of the proceeds and all the merchandise sales

Wednesday, May 7, 2008

Men and Women in the workplace – current challenges

American men aged 20 and up lost nearly 700,000 jobs while American women gained nearly 300,000 jobs between November 2007 and April 2008 according to the household survey of the Bureau of Labor Statistics (BLS). Why?

According to Business Week, men have the misfortune of having employment concentrated in the two sectors that are doing the worst: manufacturing and construction. Women employment is concentrated in sectors that are still growing, such as education and health care.

This situation is hardly good news for women, though. While they're getting more jobs, their pay is stagnant. Also, most share households with the men who are losing jobs. The troubles for the American male worker are hardly new. The manufacturing sector is in long-term decline, and construction goes through repeated booms and busts. Meanwhile women are graduating from college at higher rates than men. Some analysts even argue that men are less suited than women to the knowledge economy, which rewards supposedly female traits such as sensitivity, intuition, and a willingness to collaborate. "Men have tended to do better in the hierarchies, following orders and relying on positional power," says Andy Hines, with a Washington (D.C.) consulting firm.

And what about the pay – men make more than women, right? Men work more than women ... on the job anyway ... at least in terms of overall hours. That's just one reason why when you make a general comparison of men's and women's earnings in most fields, men usually come out ahead, according to Warren Farrell, a San Diego-based author. “People who do best in a field (financially) just plain put in more hours,"

But hours alone don't fully account for the gap in women's and men's earnings. Farrell identified 25 work-life decisions that men and women make in the course of their careers that have a direct bearing on their earning potential. Farrell found, for instance, that men are more likely to opt for doing that which can lead to a higher paycheck, including: relocate or travel extensively for work; take on more hazardous assignments; work in the hard sciences; take jobs requiring greater financial risk; work in unpleasant environments (e.g. prisons or coal mines).

Women, by contrast, are more likely to seek "careers that are more fulfilling, flexible and safe," Farrell writes. But the tradeoff is that "the pay can be lower because more people compete to be fulfilled, causing the supply to exceed the demand." Even among highly paid women -- those who make over $100,000 -- Farrell found they are more likely than men at the same pay level to forfeit some pay in exchange for more free time. Women often reduce their work hours so they can take care of their families. While men may end up with more pay in many fields, Farrell believes women can end up with a better life on balance.

In looking at respective pay, he found more than 80 occupations for regular working women in which they made more than their male counterparts. In 39 of the occupations he found women's median earnings exceeded men's earnings by at least 5 percent and as much as 43 percent. And why do some fields pay women a premium? "No one really knows perfectly the answer," according to Farrel. One factor may be scarcity. In fields like engineering, a company may get one woman and seven men applying for a job, Farrell said. If the company wants to hire the woman, they may have to pay a premium to get her. That's because she may have more competing offers than her male counterparts. The reason: not only is she a top performer who can boost a company's profitability but employing her helps a company improve its equal-opportunity standing, which in turn can help it secure government contracts.

Also, where women can combine technical expertise with people skills – such as those required in sales and other arenas where customers may prefer dealing with a woman – that's likely to contribute to a premium in pay.

It's not that Farrell doesn't think pay discrimination exists. It does, he said, but it's not always against women. There's plenty of it against men, too. He points to careers that have limited opportunities for men – e.g., dental hygienist or elementary school teacher because people prefer a woman in those roles.

Right now men are in a bad spot. The percentage of men aged 20 and over with jobs has fallen since last November from 72.9% to 72.2% in April. For women it rose from 58.1% to 58.3%. The adult male unemployment rate has risen twice as much as the female jobless rate since November.

If we look at employment sector by sector, manufacturing is over 70% male and construction is about 88% male. Meanwhile the growing education and health services sector is 77% female. The government sector, which has also remained strong, is 57% female.

Men are having a harder time than women getting back on track after losing a job. "For a man to move from a $20- or $30-an-hour union job to being a Wal-Mart greeter is devastating," says Claudia Goldin, a Harvard University labor historian. Men also shy away from some of the growing fields, such as nursing. Only about 10% of nursing students nationwide are male, notes Harriet R. Feldman, dean of the Pace University School of Nursing. Some retired nurses are actually going back to work because their husbands have lost jobs, says Lois Cooper, vice-president at Adecco Group North America.
If the recession persists, women will be more likely than men to hang onto their job. Why? In part, because women tend to choose professions in service industries, such as health care and education, which remain in demand even during tough times. Men, on the other hand, are more likely to work in manufacturing and construction, which are harder hit when consumer spending declines.

Tuesday, May 6, 2008

Save money on Prescription drugs!

A year or so ago I received a prescription that I took to my regular drug store pharmacy. They indicated that they would be checking with my insurance company on my co-pay. After a couple days I heard back from them – no co-pay, it would cost me $95 for a 30 day supply!!

As luck would have it, the day I was at the doctor, I was reading a local weekly newspaper whose front page headline spoke of the high prices of prescription drugs. I had read the article which did a cost comparison of various drug stores, pharmacies, and Costco. Costco was cheaper on every drug they compared – sometimes by a large margin. I moved my prescription to Costco (you don’t have to be a Costco member to use their pharmacy) and got my prescription for $64.

Just this week Wal-Mart announced expansion of their low-cost prescription drug program. They expanded their $4 discounted prescription drug program to offer 90-day supplies for $10 and to add several women's medications at a discount. They are also lowering the price of more than 1,000 over-the-counter drugs.

This is the third phase of the Wal-Mart plan. They have been offering $4 monthly supply prescriptions for a couple years now.

”More and more people find health care, and particularly prescribed medicines, difficult to afford. This is one of the reasons we continually work to take our $4 Prescription Program to the next level,” said Dr. John Agwunobi, Wal-Mart senior vice president and president, health and wellness. “We’re succeeding in our efforts to deliver simple, affordable, quality pharmacy solutions for families struggling with the rising costs of health care. And, our customers – and their budgets – are seeing a dramatic difference.”

Beginning today (5/5/2008), Wal-Mart, Neighborhood Market and Sam’s Club pharmacies will fill prescriptions for up to 350 generic medications at $10 for a 90-day supply. This option will give customers an additional choice and save them time and money without the hassle of purchasing or signing-up for a pharmacy discount card.

Expanding on the women’s medicines added to Wal-Mart’s prescription program in September 2007, Alendronate, the recently introduced generic version of Fosamax® used to treat osteoporosis, is now available at Wal-Mart, Neighborhood Market and Sam’s Club pharmacies for $9 for up to a 30-day supply or $24 for a 90-day supply. Compared to the $54 that women previously paid for the same generic supply or $102 for the same branded supply, Wal-Mart could save osteoporosis patients between $45 and $93 per month or up to $1,116 per year. In addition, medications to treat breast cancer (tamoxifen), menopause and hormone deficiency (combination estrogen/methyltestosterone tablets) were also added to the growing list of $9 women’s medications. Combined, Wal-Mart estimates that this expansion alone will save women more than $100 million annually.

Wal-Mart Stores and Neighborhood Markets today began a new $4 OTC program, offering customers more than 1,000 Over The Counter items priced at $4 or less without a prescription. Wal-Mart has rolled back prices on key OTC items to ensure that almost one-third of its OTC medicines are now $4 or lower. Now, many commonly used OTC medicines such as the Equate-brand versions of popular drugs like Zantac®, Pepcid® and Claritin® are priced at $4, approximately 50 percent lower than many national chain drugstores and grocers based on Wal-Mart’s internal research.

In California, Colorado, Hawaii, Minnesota, Montana, Pennsylvania, Tennessee, Wisconsin and Wyoming certain drugs are priced higher than the $4 and $10 prices
For further information on the program, customers can call 1-800-WAL-MART, visit their website at www.walmart.com/pharmacy or discuss the program with their local Wal-Mart, Neighborhood Market or Sam’s Club pharmacist.

A complete listing of the drugs in the program is available at: http://i.walmart.com/i/if/hmp/fusion/four_dollar_drug_list.pdf

Monday, May 5, 2008

Innovation

On my website and in other correspondence I have mentioned a lot about the value of innovation. I indicate the value of introducing innovation to help businesses be the best that they can be. I have quoted studies which indicate that innovation led to the extraordinary productivity gains in the 1990s. I referenced other studies which showed that a large and rising share of growth over recent decades is the result of innovation. I shared that OBCOM could bring valued innovation from “outside the office” into businesses to help them be their best and achieve their vision of success.
Now may be a critical time to look to innovation to keep ahead of the pack. In his recent autobiography, The Age of Turbulence, Alan Greenspan offers a worrying view of the prospects for the U.S. economy in the future. Quoting a review, “Most troubling of all, the author points to ‘a slowdown in innovation,’ which has been powering economic growth throughout much of the last century. This can be seen in companies using their cash flow to repurchase their own stock and pay larger dividends to shareholders rather than investing in new plants and equipment. He fears that this trend towards big dividends is ‘a warning signal of lowered prospective rates of return.’
It is important food for thought that American productivity might be slowing down, and as it does so, the price of U.S. goods may start climbing. Concerned investors everywhere should take note. If Greenspan is right, foreign markets may look more attractive.”