The Appearance of Knowing

Time writer Jeffrey Kluger wrote a fun piece the other day called Competence: Is Your Boss Faking It? The premise of the article is how leaders, and perhaps your boss, sometimes present a position of dominance in a subject that they really don’t have an advantage. Research showed that in a group dynamic, the person who acted most knowledgeable about the subject is the one who the others aligned with. So what behavior was displayed that attributed to this dominance? It was unfailing input.

Those that wanted to be in a leadership position never wavered with their answers. They offered them and continued to do so. Being right is practically secondary to charisma and confidence.

I agree and think it should be this way. Why? Because many decisions are not right or wrong choices. We live in a world of shades of grey and it takes a lot of fortitude to make trade offs and not apologize for doing so. Laboring over it only stirs emotion. Delaying the decision also prevents everyone from moving on and starting the healing process.

This isn’t a carte blanche free pass to those who always have an opinion. I just want everyone to investigate the authority.

Has Bad Behavior Irreparably Damaged the Title CEO?: Fortunately “Good” CEOs Are Still Out There

By Suzanne
Bates, Author of Motivate Like a CEO: Communicate your Strategic Vision and Inspire People to Act!

Day after day we’re being pummeled by news of bad CEO
behavior, so much that you have to conclude that America’s business executives
are incapable of getting the message–its time for restraint. In the last
couple of weeks there’s been one egregious example after another of excess,
greed and sheer stupidity. It’s so ridiculous that you’d have to conclude these
CEOs aren’t just out of touch… they simply don’t care.

From the $18.4 billion in bonuses paid out by Wall
Street last year, to the news that former Merrill Lynch CEO John Thain spent
$1.22 million to redecorate his office; and word that Citigroup had planned
(and later denied they would) purchase a $50 million 12-seat luxury jet– after
getting $45 billion in Troubled Asset Relief Program (TARP) funds. So you have
to wonder why aren’t CEOs at least afraid of how these actions might be
perceived? They’re not just inviting regulators to their doorsteps, they’re
risking their company’s hard-won brands and possibly their own high-flying
careers.

Has the title of Chief Executive Officer been irreparably
damaged by all this news? In the court of public opinion, yes – no question –
the title has lost respect. Yet, across America, there are countless CEOs who
are doing the right thing, i.e., rolling up their sleeves and working hard to
keep their companies on course. These CEOs won’t make headlines but some are
downright heroic as they try to keep their employees on the job and do right by
their customers.

For example, the once
retired chairman and owner of a commercial lending bank in Arizona is staying
in his empty house, sleeping on an air mattress.  His family had moved to
the Northeast but he came back to the Southwest after the real estate collapse
threatened his bank’s survival.  He is working 14 hour days, away from his
family for weeks at a time, going out every day speaking to customers, and
spending hundreds of hours negotiating with bank examiners and creditors, to
buy time. 

This executive isn’t just
making decisions for the sake of appearances – he simply will not tolerate
excess.   He fired his CEO for taking home unwarranted commissions,
recovered the company car that his CEO drove (a $100,000 Range Rover), listed
it for sale on Craig’s list, and purchased a used Passat for himself so he
could sensibly commute to the bank every day.  

While some CEOs are
splurging, plundering and pillaging their businesses, the vast majority are
not. And if you look around in your own community, you realize that you know
these good folks. They are your neighbors and friends who are not taking
home a paycheck right now, they’re instead lending money back to their
businesses, agonizing over layoffs, working late into the night, negotiating
with creditors and virtually killing themselves to stay afloat.

So though a few highly
questionable CEOs have besmirched the title, it stands to reason that most
chief executives, whether from a Fortune 1000 firm or a small, midsize concern,
remain passionate about their businesses and just as devoted as ever to their
employees and customers. They’ve made personal sacrifices while asking their
employees to do the same, and they don’t need federal regulators to tell them
what is right – their judgment is all they need. Plus, their principles are on
display every single day, in the form of the decisions they make. This is the true spirit
of American business which will not be corrupted or compromised by greed or
selfish interests.

Many people out there aspire to be a CEO one day – for
them it would mark the pinnacle of their career. This part isn’t going to
change just because of a few bad examples. Becoming CEO or president of a
company is a responsibility that most people take very seriously. That’s why
it’s important for good CEOs to keep doing the right thing and setting a good
example for the rest. For the CEO title to regain credibility with the American
public, the media probably also needs to start taking note of these good guys
and good women.

Tremendous government pressure will be exerted upon
CEOs –for awhile at least – until the economy is back on track. President Obama
will try to use a bully pulpit to achieve this, taking steps like sending
Treasury Secretary Timothy Geitner to Wall Street to deliver a message that
these CEOs’ actions are unacceptable.

There’s word too that New York Attorney General Andrew
Cuomo may demand the return of $4 billion in bonuses paid by Merrill Lynch
& Co just before it was acquired by Bank of America Corp. Cuomo wants to
know what Bank of America Chief Executive Kenneth Lewis knew about the
accelerated bonuses and about Merrill’s surprise $15 billion net loss in the
fourth quarter, one source told the agency.

CEO pay will remain in the news too. The CEO of a
Standard and Poor’s 500 company made, on average, about $14 million in total
compensation in 2007. Senator Claire McCaskill’s initially offered a bill
capping executive pay at companies accepting federal bailout dollars at
$400,000 a year, what President Obama makes. President Obama has now followed
suit with a proposal for a $500,000 cap.

As an executive coach who has worked with outstanding
business leaders over the years, I wrote a book called “Motivate Like a CEO”
because I believe there are many, many examples of motivating, inspiring
leaders out there who are connecting people with purpose and passion toward a
common goal. This might be the highest definition of leadership, in addition to
the countless leaders out there who go to work every day passionate about what
they do and who know how to empower others to achieve great things.

In today’s current business climate, we certainly need
more leaders like this, who can genuinely communicate and motivate their
organizations. People long to be a part of the turnaround, and they have many
of the answers to your company’s struggles right now. If you empower them and
harness their creativity and energy, you’ll accelerate your own recovery and
position yourself for growth as the economy recovers. You’ll also be
well-equipped to take advantage of the many opportunities that still exist,
even in these bewildering and turbulent times.

Copyright  ©
2009 Suzanne Bates, author of Motivate Like a CEO: Communicate your
Strategic Vision and Inspire People to Act!

Author Bio

Suzanne Bates is author of the new business best-seller
“Motivate Like a CEO, Communicate Your Strategic Vision and Inspire People to
Act!” (McGraw Hill 2009) as well as “Speak Like a CEO, Secrets for Commanding
Attention and Getting Results” (McGraw Hill 2005). She is President and CEO of
Bates Communications, an executive coaching firm.
www.bates-communications.com She is also author
of 
www.thepowerspeakerblog.com

Sustaining Large Economic Growth is Key for the US

A couple of weekends ago it was cold. I didn’t go outside, which means I had time to invest in some longer format reading. The piece that grabbed my attention was called The Big Fix by David Leonhardt in the NY Times Weekend Magazine. David Leonhardt also contributes to the NY Times Economix blog. “The Big Fix “is a review of President Obama’s intentions with the Stimulus legislation. There were several stats, postulates, and facts that I enjoyed so much I pulled them out for comment:

——————————-

But while Washington has been preoccupied with stimulus and
bailouts, another, equally important issue has received far less
attention — and the resolution of it is far more uncertain. What will
happen once the paddles have been applied and the economy’s heart
starts beating again? How should the new American economy be remade?
Above all, how fast will it grow?

That last question may sound
abstract, even technical, compared with the current crisis. Yet the
consequences of a country’s growth rate are not abstract at all. Slow
growth makes almost all problems worse. Fast growth helps solve them.
As Paul Romer, an economist at Stanford University, has said, the choices that determine a country’s growth rate “dwarf all other economic-policy concerns.”

This is an underlining issue that isn’t getting enough attention from the media. The US has to grow significantly to recoup the demands this economic crisis has produced. Growth, as generated through productivity gains and efficiencies, can allow for higher income levels and thus higher tax intake (to pay off the debt). This is without increasing the tax percentage.
Over the last 10 years the US productivity levels have been good but the pay out hasn’t been distributed evenly. The upper income brackets have absorbed it. One reason for this is the threat of off shoring of work that the middle class has performed historically.
——————————-

Well before the housing bubble burst, the big productivity gains brought about by the 1990s technology boom seemed to be petering out,
which suggests that the Internet may not be able to fuel decades of
economic growth in the way that the industrial inventions of the early
20th century did. Annual economic growth in the current decade, even
excluding the dismal contributions that 2008 and 2009 will make to the
average, has been the slowest of any decade since the 1930s.

I like this part and I associate it with this illustration from Paul Krugman:

——————————-

In the early 1980s, an economist named Mancur Olson developed a theory
that could fairly be called the academic version of Rahm’s Doctrine.
Olson, a University of Maryland
professor who died in 1998, is one of those academics little known to
the public but famous among his peers. His seminal work, “The Rise and
Decline of Nations,” published in 1982, helped explain how stable,
affluent societies tend to get in trouble. The book turns out to be a
surprisingly useful guide to the current crisis.

I just wanted to bring attention to this work. In it is the idea of Special Interest Groups and the power they come to yield, especially at the detriment of others.

Speaking of special interests, here are some stats:

  • 8 Major League ballparks have financial-services names as a tie in
  • More students at Princeton enrolled in Finance than any of their traditional engineering programs
  • In the 1970s and 1980s financial-services companies accounted for 15% of corporate profits in the US
    • Only 18 months ago the financial-services share of corporate profits rose to 27%

——————————-

“In a crisis, there is an opportunity to rearrange things, because the status quo is blown up,” Frank Levy, an M.I.T.
economist and an Olson admirer, told me recently. If a country slowly
glides down toward irrelevance, he said, the constituency for reform
won’t take shape. Olson’s insight was that the defeated countries of
World War II didn’t rise in spite of crisis. They rose because of it.

Starting with a clean slate provides so many options. The US was once known as the country that didn’t hold anything sacred. It would build something up and tear it down to build something else. But at some point that stopped happening. I’ve blamed the financial tool called Cost/Benefit analysis in other posts. It obscures the real advantages of starting over because the costs don’t consider opportunity lost well enough. To change fundamental problems a clean slate is essential.

But England responded to their dire standing in the world by electing Margaret Thatcher. She took dramatic steps to right the ship.

In the 30 years since her election, England has grown faster than Germany or Japan.

——————————-

a trip from Boston to Washington, on the fastest train in this country,
takes six-and-a-half hours. A trip from Paris to Marseilles, roughly
the same distance, takes three hours — a result of the French
government’s commitment to infrastructure.

I just love that stat. It takes more than twice as long in the US, the place where only the strong survive.
——————————-

Spending by the private sector hasn’t changed much over time. It was
equal to 17 percent of G.D.P. 50 years ago, and it is about 17 percent
now. But spending by the government — federal, state and local — has
changed. It has dropped from about 7 percent of G.D.P. in the 1950s to
about 4 percent now.

In this same time Consumer spending rose to 70% from 67%. That doesn’t leave much wiggle room. But to comment on the 4% of government, maybe I just have revisionist history, but those times seemed to have many public works projects. Building dams, bridges, roads, canals, power grids, schools, and airports were common happenings. Now you get some road repairs, asbestos removal from schools and that is about it. No one wants their taxes to go up, so rationalizing these improvements is increasingly difficult. And the appetite for hearing about how the future will benefit seems to have dimmed.
——————————-

Later, the Defense Department developed the Internet, which spawned AOL, Google
and the rest. The late ’90s Internet boom was the only sustained period
in the last 35 years when the economy grew at 4 percent a year. It was
also the only time in the past 35 years when the incomes of the poor
and the middle class rose at a healthy pace. Growth doesn’t ensure
rising living standards for everyone, but it sure helps.

The illustration above shows the middle class gains with a little dip on the right hand side. I also think the internet impact is understated in this paper. Although the economy is currently in a funk, the internet is still evolving and can still generate growth companies and industries. Maybe if more people were graduating with software engineering degrees in the US…
——————————-
Green jobs are seen as a growth avenue by the President, but he faces some criticism for the cost, especially as related to the cap and trade idea of carbon.

Various analyses of Obama’s cap-and-trade plan, including one by Stavins,
suggest that after it is fully implemented, it would cost less than 1
percent of gross domestic product a year, or about $100 billion in
today’s terms. That cost is entirely manageable. But it’s still a cost.

I’ve already said it, but why do start up costs, which every past, present, and future installation incurs, outweigh endevearors that have such great potential… oh yeah, special interest groups. They don’t want to lose their cash cow.
——————————-
These stats are truly revealing. Especially when you think about what gets mentioned and what doesn’t.

Surprisingly, the debt that the federal government has already
accumulated doesn’t present much of a problem. It is equal to about $6
trillion, or 40 percent of G.D.P., a level that is slightly lower than
the average of the past six decades. The bailout, the stimulus and the
rest of the deficits over the next two years will probably add about 15
percent of G.D.P. to the debt. That will take debt to almost 60
percent, which is above its long-term average but well below the levels
of the 1950s. But the unfinanced parts of Medicare,
the spending that the government has promised over and above the taxes
it will collect in the coming decades requires another decimal place.
They are equal to more than 200 percent of current G.D.P.

So healthcare is vital and it isn’t being ignored. Peter Orszag has increased his healthcare analyst staff to 50 in the Congressional Budget Office. The reason:

Surprisingly, the debt that the federal government has already
accumulated doesn’t present much of a problem. It is equal to about $6
trillion, or 40 percent of G.D.P., a level that is slightly lower than
the average of the past six decades. The bailout, the stimulus and the
rest of the deficits over the next two years will probably add about 15
percent of G.D.P. to the debt. That will take debt to almost 60
percent, which is above its long-term average but well below the levels
of the 1950s. But the unfinanced parts of Medicare,
the spending that the government has promised over and above the taxes
it will collect in the coming decades requires another decimal place.
They are equal to more than 200 percent of current G.D.P.

It is important to figure out what processes work better for the patient, the doctor, and the system as whole. To do this it is good to compare results and practices.

Seltzer told me that big-spending doctors typically explain their
treatment by insisting they have sicker patients than their colleagues.
In response he has made charts breaking down the costs of care into
thin diagnostic categories, like “respiratory-system diagnosis with
ventilator support, severity: 4,” in order to compare doctors who were
treating the same ailment. The charts make the point clearly. Doctors
who spent more — on extra tests or high-tech treatments, for instance —
didn’t get better results than their more conservative colleagues. In
many cases, patients of the aggressive doctors stay sicker longer and
die sooner because of the risks that come with invasive care.

——————————-
Earlier in this post I mentioned the threat of off shoring jobs as a reason for income inequality. The reason the threat is real is mainly because India and countries like it (not China) concentrated very heavily on education after it broke with countries like England. It stayed with it even when the financial returns weren’t there. Well, their investment is now paying off. And their timing couldn’t be more perfect. Here is why:

Not only did mass education increase the size of the nation’s economic pie; it also evened out the distribution. The spread of high schools — by 1940, half of teenagers were getting a diploma
— meant that graduates were no longer an elite group. In economic
terms, their supply had increased, which meant that the wage premium
that came with a diploma was now spread among a larger group of
workers.Sure enough, inequality fell rapidly in the middle decades of the 20th century. (view illustration above again)
But then the great education boom petered out, starting in the late 1960s.
Between the early 1950s and early ’80s, the share of young adults
receiving a bachelor’s degree jumped to 24 percent, from 7 percent. In
the 30 years since, the share has only risen to 32 percent. (for 30 years it rose 17% then the subsequent 30 saw an increase of 8%)
For the first time on record, young men in the last couple of decades haven’t been much more educated than their fathers were.
The last 30 years, when educational gains slowed markedly, have been years of slower growth and rising inequality.
In recent decades, as the educational attainment of men has stagnated,
so have their wages. The median male worker is roughly as educated as
he was 30 years ago and makes roughly the same in hourly pay. The
median female worker is far more educated than she was 30 years ago and
makes 30 percent more than she did then.

Different programs have come in to change this trend with varying degrees of success. One the article highlighted is called Promise in West Virginia. The idea is to provide scholarships to State Univeristies to students who attained certain high school grades and test scores. This program improved on other inefficient ones because it required the  students to complete their college education in 4 years. It has since implemented a condition to require 4 year time frames in order to receive the funding

Judith Scott-Clayton, a young economist who analyzed the program, concluded
that it had raised the on-time graduation rate by almost 7 percentage
points in a state where many colleges have a graduation rate below 50
percent.

——————————-
I like this segment as the finish.

The American economy didn’t simply grow rapidly in the late 1940s,
1950s and 1960s. It grew rapidly and gave an increasing share of its
bounty to the vast middle class. Middle-class incomes soared during
those years, while income growth at the very top of the ladder, which
had been so great in the 1920s, slowed down.

Research in Motion (Blackberry) Should Buy Eastman Kodak

File this under whimsical thoughts.

I used to live near Rochester, NY and I interned at Eastman Kodak for two summers in college. It was a great experience. I learned so much about manufacturing one year and the next it was corporate life. Manufacturing film is remarkable because it is all done in the dark (you can’t expose film to light). There are many different OSHA standards to follow and truly hazards all around. When I was in the corporate offices I observed a different mentality. It was much more reverential and I mean that in both a positive and a negative. What was important to understand is the personalities and how to navigate their priorities. That was a couple of enlightening summers.

Since that time I’ve noticed Eastman Kodak continually laying off employees as it tries to adjust to a digital age of photography. Their strategy for digital expansion has had several stumbles. I attribute this mainly to Kodak being unable to change it’s identity. It is a chemical manufacturing company – digital services is somebody else.

Research in Motion or RIMM is the company that make the Blackberry. Since 2001 the Blackberry has been the phone of choice for business personnel. Their killer app is the integration of company email into the handset. Since that time RIMM has grown and expanded their product line to consumer oriented devices that do pictures and music in addition to email and talking. Their Operating System is very user friendly as well. RIMM does digital services.

Research in Motion should buy Eastman Kodak! Why? EK is cheap. Their market capitalization is $1.25 Billion. That means RIMM, who has a market capitalization of $33.39 Billion, can be bought for somewhere around $2 Billion, which gives the shareholders a reason to deal. So what does RIMM get for $2 Billion? An operating entity in the photography world, a patent portfolio that can be mined, and most importantly, an expertise in digital recognition. This last part is a little vague so I will explain.

Google leads by a large margin in internet search. It uses this leverage to gain advertising dollars. Over the last two years Google has launched an open source platform for cell phones, so they now directly compete with RIMM. Cell phone devices are morphing into multichannel communication machines – understanding information is key. Google does a good job of this, but one area of weakness is in pictures. Computers don’t read pictures for relevance very well. This is an area that Kodak can help RIMM. Now, I’m not presupposing that EK has this down pat, but it does have many sharp minds and patents that can add to something.

There are downsides to a RIMM/EK deal but the gains for each company outweigh them. Kodak simply can’t survive as is and Research in Motion must continue to grow their data and information competencies.

January 2009 Jobs Report and Wages

Here are the job market and compensation numbers for January 2009 (based on the job report):

Net
loss of 598,000 jobs in the month
(revised on 3/6/09 to a loss of 655,000 jobs, revised to a final loss of 779,000)

  • Analysts expected a loss of 540,000
  • Thirteen straight months of job losses
    • 3.6 million jobs lost in 2008
    • Almost 1.8 million jobs lost in the last three months
  • November was revised to loss of 597,000 jobs (revised to a final loss of 728,000)
  • December was revised to a loss of 577,000 jobs (revised on 3/6/09 to a loss of 681,000 jobs, revised to a final loss of 673,000)
  • Long term unemployed stayed flat at 2.6 million persons
  • Discouraged worker, those working part time because they can’t find full time work, reached 3.1 million

Unemployment rate rose to 7.6%

  • Analysts predicted a rise to 7.5%
  • Underemployment is now at 13.9%
  • From 13.5% last month (an increase of 0.4% in one month!)

Specific Segment Job numbers:

  • Manufacturing lost 207,000 jobs
  • Construction lost 111,000 jobs
  • Retailers lost 45,000
  • Temporary Work lost 76,000 jobs
  • Transportation and Warehouse lost 44,000 jobs
  • Leisure and Hospitality Services lost 28,000 jobs
  • Government sector added 6,000
  • Health care grew by 19,000 jobs

Wage:

  • The average weekly paycheck is $608.32
    • A drop of almost $3
  • The average hourly work week stayed at 33.3
    • Lowest it has ever been recorded for two straight months

Bureau of Labor Statistics

Job Report Stats Summary

Pay, Wall St, and Legislation

Compensation for Wall St has received so much attention lately. It came to a head about three weeks ago when news broke almost simultaneously that Merrill Lynch had moved up their $4 Billion bonus payments and the industry as a whole paid around $18 Billion to its executives and employees. That is a big number and it is the sixth largest ever.

Were these numbers disproportionate to performance? Absolutely, but the story was going to be damaging no matter what the figures were. The idea of a bonus is not the same for Wall St and Main St. On Main St a bonus is an additional reward to an employee that has improved the company in some extraordinary way. But on Wall St it is simply a variable part of normal compensation. Salaries for many Wall St executives are relatively low and the inherent agreement is that the rest is made up through a bonus. This system works for Wall St. Why? Because of why everyone really hates them, it isn’t based on what you know but who you know. And bonus money is paid out to who you bring in (and their accounts). Once you have their relationship you can charge fees and further expand a prestige of portfolio size and it feeds on itself. There are very few on Wall St that actually create real value, the rest is mostly a who you know industry.

President Obama legislated a cap on pay at companies that received bail out money. This is a knee jerk reaction to a sensationized story about bonuses. It paints talent at these companies with a broad brush. There are many employees at these companies that did perform well. Putting restrictions on pay undermines Human Resource management within these companies. Granted, if poor performers were still getting a wink-wink nod-nod lump sum then the HR teams weren’t doing their job, but those cases are the exceptions and not the norm. HR within these companies need to worry about their hiring brand. If these companies are to rise out of these situations then you need the best employees moving to the top and compensated for sticking through the hard times. The plan does call for some good long term motivation as well, via restricted stock. So it isn’t all bad.

A more suitable form of legislation would have been to tie a multiple to the executives pay. What I mean is that no executive can make say 25 times as much as the lowest employee makes. For instance say the lowest paid employee makes $12 an hour, that means the executives can make $624,000. If the executives wants to make more than that then he must make sure the company can grow and distribute the proceeds more equitably.

Here are some numbers and illustrations I pulled from my 300+ entries over the last year and half:


According to the most recent proxy filings, which covered 2007 results, only 47 percent of the companies made the required disclosures concerning short-term incentive pay, like cash bonuses. While this figure is substantially higher than the 23 percent that complied with the rule in 2006, it is nonetheless distressing.
On long-term incentive pay, which typically includes grants of stock options or restricted shares, the compliance was a more robust 62 percent last year. In 2006, only 41 percent of companies adhered to the rule, the Reda study showed.
—————————————————————————-
While productivity jumped almost 20 percent since 2000, the real median
hourly wage of all workers rose just 3 percent in the same period.
Since 2003, productivity has risen 5 percent, while the median hourly
wage fell 1.1 percent.

Yet, in the period between 2003 and 2007, wage gains for median
workers, male and female, as well as high school and college workers
have all been flat or falling.

Not so for workers at the highest
end of the wage scale. At the 95th percentile, real wages have risen
9.4 percent since 2000 and 5.1 percent since 2003.

—————————————————————————-

The average CEO of a large U.S. company made roughly $10.8 million last
year, or 364 times that of U.S. full-time and part-time workers, who
made an average of $29,544, according to a joint analysis released
Wednesday by the liberal Institute for Policy Studies and United for a
Fair Economy.

That gap is down from 411 times in 2005 and well-below the record high
of 525 times recorded in 2000. But the comparison isn’t exactly
apples-to-apples, in part because IPS and UFE changed how they measured
CEO options pay this year (2007).

—————————————————————————-

In their National Bureau of Economic Research working paper, Thomas Philippon of New York University and Ariell Reshef of the University of Virginia
found that the difference in pay between finance and the rest of
industry was slight, if any, except in the late 1920s to 1930 and then
again from the mid-1990s to 2006. In those boom years, compensation in
finance was 30 percent to 50 percent higher than in the rest of
industry.

—————————————————————————-

Gallop poll conducted in early August that revealed 48% of Americans
“completely satisfied” and another 42% are “somewhat satisfied.”

—————————————————————————-

Adjusted Tax Returns:

2000 – $57,289
2001 – $51,870
2006 – $58,029
Percent increase from 2000 to 2006 – 1.2%

Total income increase by $619.2 Billion, an 8.3% increase

All of it went to people earning more than $75,000
$260 Billion of that total went to those making over $1 million

Average Wage:

2000 – $47,097
2003 – $45,956
2006 – $46,996
—————————————————————————-
the South and Southeast rank #1 as the place where senior level job
growth is most happening. The West was next followed by the Southwest.
The Northeast and New England placed fifth. And the reason given for
the first place rank and the fifth place rank is the cost of labor.
—————————————————————————-

Wall St Bonuses:

  • $18 billion less in pay and benefits compared to 2007
  • If true, this would easily surpass 2001 when the drop was by $6.5 billion
  • The city would lose about $10 billion in potential incomes to tax
  • Compensation for six of the largest firms show a decline of $9.5 billion in the first half of 2008 when compared against 2007

Other stats:

  • Year end bonuses for investment bankers usually comprises at least three-fourths of their income
  • Wall St. employs about 178,000 workers in NY city
  • Normally, these payments contribute to about 10% of NY city’s tax revenue and 20% for the state.
  • The projected decline in state tax revenue is by $700 million

—————————————————————————-
From July 2008:

Some stats from an article today by Barney Gimbel called The New New World Order.

The 54 developing markets surveyed by Global Insight will post a 6.7% jump in real GDP this year

  • down from 7.5% last year
  • The 31 developed countries will grow an estimated 1.6%

The middle class in China is expected to multiply sevenfold by 2020

  • to 700 million people

The middle class of India is expected to multiply by tenfold

  • to 583 million people

New homes require building materials

Since 2000 the prices of steel, oil, and copper quadrupled

Wal-Mart’s (WMT, Fortune 500) international sales grew 17.5% this year

  • triple the US
  • now constitute 24% of the company’s total revenue, up from 8.9% a decade ago

Inflation

India inflation rose to above 8% in May

  • below 4% last August

Chinese inflation was 7.7% in May

  • up from 1% in early 2006

Ukraine and Venezuela see inflation at 30%
Vietnam is experiencing 25% inflation

—————————————————————————-

—————————————————————————-


—————————————————————————-

  • The value of job mobility adds up faster in the early stages of
    a worker’s career. Women tend to move less than men, but still pretty
    close.
  • Mobility early in careers is considered a wage asset as
    long as it isn’t based on layoffs, discharges, or leaves. A positive
    wage compared with job stability can result based on these moves.
  • A plateau effect can take place eventually because the lack of a five year tenure at any job.
  • Each
    year of tenure is related to approximately 2.4% wage increase for men
    and 2.9% increase for women. These increases compound each other for up
    to five years.
  • After five years wage growth starts to either plateau or erode.

Other facts I thought were important:

  • Men are laid off more frequently than women.
  • Married men experienced greater wage outcomes when switching jobs than single men and those without children.

2006 median household earned $48,201
1999 median household earned $49,244
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What disappoints me is from about the 2002 time frame until recently,
productivity was surging, but income wasn’t following suit. Much of the
productivity gains went to executive’s incentive deals, or at least I
thought it did. Some of it is sitting in a bank account. It just isn’t
the common worker’s bank account.

1998 Cash Holdings on Balance Sheets – $203 Billion
2008 Cash Holdings on Balance Sheets – $600 Billion
—————————————————————————-
Here are the productivity statistics for the fourth quarter of 2007:

  • Overall productivity increased at a annual rate of 1.8% (nearly double what analysts thought)
  • This is compared to an increase of 6% in the third quarter
  • For all of 2007, productivity was up 1.6%
  • In 2006 it was 1%
  • Earlier in the decade (2000-2004) productivity averaged 3.2%
  • Labor costs rose by 2.1 percent (a little lower than analysts expectations)
  • Labor costs fell by 1.9 percent in the third quarter
  • Labor costs fell by 1.1 percent in the second quarter
  • For all of 2007, labor costs were up 3.1%
  • For all of 2006, labor costs were up 2.9%
  • GDP was 0.6% in the fourth quarter (revised to a contraction of 0.2%)

When
productivity outpaces labor costs then living standards improve. Why?
Because it allows businesses to pay their employees more without
raising the cost of their goods, which keeps inflation in check. That
didn’t happen in the fourth quarter of 2007.

Revision: Productivity was revised to 1.9%
Revision: Labor costs changed from 2.1% to 2.6%
—————————————————————————-
Here is a list of what some of them were paid (these numbers come from forbes):

Charles Prince – in 2006 from Citigroup

  • $1,000,000 Salary
  • $13,200,000 Bonus
  • $11,775,719 in other compensation (stocks of some sort)

Richard Parsons – in 2006 from Time Warner

  • $1,500,000 Salary
  • $0 Bonus
  • $20,979,353 in other compensation (stocks of some sort)

Stanley O’Neal

Bruce Chizen – in 2006 from Adobe

  • $925,000 Salary
  • $681,262 Bonus
  • $3,258,971 in other compensation (stocks of some sort)

Bruce Chizen left Adobe under the premise of my earlier post titled Next Generation CEO
—————————————————————————-
The statistics are amazing in the relationship between earnings and
likelihood of accepting blame and apologizing for it. Those stats are:

Willing to Apologize               Earnings
         92%                    $100,000+
         89%                    $75,000 – $100,000
         84%                    $50,000 – $75,000
         72%                    $35,000 – $50,000
         76%                    $25,000 – $35,000
         52%                                   – $25,000
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Two Ways to Make Your Resume More Significant

Everyone looking for a job has a story to tell with their resume. Fashioning the story is vital. Assuming your resume has gotten past the first steps and has landed on someone’s desk that can make the hire. Ask yourself, what separates me from the three or four others that are also sitting there?

Times are tough and companies want someone who can creatively stretch a dollar. This can happen through innovation, but innovation is hard. Another way to get the most for a dollar is by changing behaviors associated with the dollar. Two forms of this exist: Personal Influence and Social Pressure.

Personal Influence requires you to have relationship collateral with the people you want to sway. Many analysts of Tom Brady, the quarterback for the New England Patriots, say that he is one of the hardest workers in practice. He drives himself continually to improve. When his teammates see this they know he is giving it his all. This tireless work ethic provides him a lot of respect and when times are tough and he needs a certain performance from his team mates, he gets it. But what else is important to note is that he doesn’t live on past accomplishments. He repeats these diligent activities because he knows that he has to personally connect with each person he wants to influence over and over again. That is the strongest bond.

Social Pressure is an awareness mechanism. No one wants to be a jerk, so leveraging that feeling can yield terrific results. For instance littering; a couple of decades ago you would see soda cans, newspaper, and other odds and ends on the side of the road. Nowadays that is an infrequent occurrence. Why? Adopt-A-Highway. The people who participate in the program clean it up and take pride in their area. Their organization name goes on a sign on the side of the road and passersby realize they know these people and know they don’t want them on the side of the road picking up needless garbage. Another example is power usage. Several utility companies are now alerting their customers about their usage patterns compared to their neighbors and an average. This leverages competitiveness and promotes improvements in every customer – some more than others of course. And it costs the utility very little to implement.

You’ve probably participated or even developed programs in your work environment that directly correlate with one or both of these behavior changers. If you haven’t, then I suggest you start immediately. It will pay dividends. Then add it to your resume and underscore how you accomplished something that used very little money and is mainly successful because of your character reputation and insightfulness.

Loving the Job and Starting a New Chapter

Witnessing someone leave a job they truly love is always emotional. This past Friday I listened in on this exit and it was sad. But this wasn’t a layoff, this person was leaving of their own accord.

Sports is one of my passions. I live in Charlotte which has the Carolina Panthers in the NFL, the Charlotte Bobcats in the NBA, a triple-A baseball team, numerous college sports associations, and a unique position as the home to NASCAR race teams. The city carries a certain amount of prominence on the national stage, but isn’t quite big time either. To match that charm was the Morning Sports Page on the AM channel WFNZ. It was mainly two guys bantering back and forth the sports scene, both local and national. Jim Celania and Gary Williams are their names. Jim is the older of the two and tends to cut through the BS since he’s been there and done that. Gary is the up and comer who maintains the professionalism and keeps the show moving along. Jim, although often crass in delivery, is wise and you can tell that Gary eats up the perspective and learns from it. Jim has a self confidence that allows him to be the butt of the joke at times – he can laugh at himself. It is an endearing quality and everyone that listens knows it.

And here is where the sadness came in. Gary left the program on Friday (1/30/09) to take a national job at Sirius radio. During his last segment he thanked the producers and began to breakdown. He then mustered a wavering “And you…” which tailed off. He was referring to Jim. I don’t know what Jim’s reaction was, it was radio. Gary through one last sobbing breath thanked the city of tremendous opportunity for him, Charlotte.

This chapter for Gary has ended. He moves on to other endeavors in his life and he will learn from other coworkers. But in closing this chapter he knows that a certain part of his professional/personal life can never be unknown again. He is more likely to be the teacher than the student. It’s the trappings of wisdom – responsibility, hard choices, and age.

In a world of no sure things, it is nice to know that there are still people who feel so strongly about their craft, their mentors, and their city to publicly display an emotional good bye.