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.