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Business is Too Big
Not to say, “I told you so”, but I did.
Business is too big. Period.
The chronicles of some of America’s most famous and enormous institutions come readily to mind.
How could the bastion of the investment community allow two rogue investors to bring their house down? Matthew Tannin and Ralph Cioffi managed the biggest hedge funds for the company. For two years, they knowingly invested in what began as “risky”, mortgage funds, which became “you shouldn’t touch it” mortgage funds before they became “completely worthless”.
Here is a direct passage from an e-mail one sent to the other:
“Believe it or not — I’ve been able to convince people to add more money.”
And with their arrest in June 2008, down came one of the nations’ oldest investment houses. Not to mention, the devastation that they wreaked with the retirement accounts of the thousands of investors who trusted them. Two men created this much havoc.
The glaring question is; “how could Bear Stearns not have had a system in place to monitor these people?” Surely, at sometime in the last two years, you would have to think that the other executives at Bear Stearns could have asked the $64 question.
On a trip to Denver in May, we stayed on the 16th Street Mall. There were 5 Starbucks coffee shops within an 8 minute walk. Five. The irony of this is that Starbuck’s has been the chain that other companies follow demographically. They are supposed to be the leading company of their kind at positioning stores etc.
By late March 2008, Starbucks had more than 16,226 stores worldwide, including 11,434 stores located in the United States.
In fiscal 2008, the company closed 205 out of 600 stores slated to be shuttered by the end of fiscal 2009.
Too much. Too many.
THE BIG 3
There may be no greater billboard for the face of American business than the Big 3 auto makers. General Motors, Ford and Chrysler, pleading with the Government to bail them out and give them billions of dollars.
Here’s my question, to all three of them?
I am a golf professional; not a $10M a year executive at GM, but I knew 10 years ago, that there was a need for energy/fuel efficient cars. But in the last 10 years, cars have gotten bigger and less fuel efficient (could someone please tell me why, a suburban stay-at-home Mom, needs a Hummer?).
“How, could not one of you, have developed a fuel efficient vehicle?”
The framework needs changed. The checks and balances need to be checked and balanced. Omnipotence needs to be replaced with accountability.
And we, as a culture, need to return to some old-fashioned values. Rather than being the exception, the following should become the rule.
If you say you are going to do something, do it. Tell the truth the first time around and you will have to spend a lot less time creating “spin”.
DO THE RIGHT THING.
Empower your employees to do the “right thing” by your customers as opposed to offering a battery of policy and procedure that undoes any reasonable request.
The allure of Democracy is that if you work hard, you get rewarded for that. 21 year olds, who graduate from college and expect to make $200K per year immediately before retiring at 29, need to wake up and go to a nearby Starbucks.
In previous generations it was a common thing for someone to work for a company all of their life. That is rare today. Companies should do everything humanly possible to reward a great employee for a job well done. Conversely, we should be loyal to the company that we work for (as opposed to always looking for something better, or continually complaining about what we don’t like).
See other people in a new light. People are not ‘assets’ or ‘collateral’; nor should they be ‘expendable’ or ‘disinter mediated’. Treat people as human beings, with courtesy, respect and dignity.
I can only imagine what you are thinking when reading this. That this is naïveté in its most embryonic form. That all of the world’s economic problems are so much bigger than this and these “Ben Franklin vignettes” are too simplistic, by half.
As much as we would like an immediate fix to the problems at hand; there isn’t one. There is no single answer to all that ails us in business.
It’s kind of like deciding to get healthy. If you are 30lbs. overweight, you won’t shed the baggage overnight. You need to make a dedicated commitment to exercise, eat healthier foods and indulge, less.
It is a called a process. It is a process that we should begin immediately.
Be smaller; do bigger things.
Many more articles in Insight & Commentary in The CEO Refresher Archives