Thursday, February 16, 2006
Central Banker Heaven and the U.S. Economy
Last
Friday I attended the Business Forecast Luncheon in Dallas, sponsored
by the University of Chicago Graduate School of Business. Guest
speakers were Dr. Robert Aliber, Professor of International Economics
and Finance (Emeritus) at the University of Chicago and Dr. Harvey
Rosenblum, Executive Vice President and Director of Research, Federal
Reserve Bank of Dallas. The talks were excellent as they were last year.
What
really drives me to write this post is that we are seeing Alan
Greenspan retire. When I think about things, he?s close to the only
central banker that I have experienced during my entire adult/business
life, where Greenspan has reigned for some 18+ years. Central banking
has an important effect on business and the health of the economy, and
this something that the luncheon speakers are renowned experts on.
The general consensus was that Alan Greenspan will go to ?Central Banker Heaven?. More on this later.
While
last year?s forecasts focused on the deficit and the exchange rates,
what came to the forefront this year were three things that will impact
the economy for the next twelve months. These are: the (deflating)
housing bubble, term structure of interest rates (and the inverted
yield curve), and the philosophies and makeup of the new chairman (Ben
Bernanke).
Although
I will gloss over the individual perspectives of the two speakers, my
general takeaways on the three areas were the following:
- Housing
bubble is deflating ? Apparently in the areas of concern (e.g., Boston,
Southern FL, CA), prices are starting to fall 10%ish. Well-known
builder, Toll Brothers, has had its stock price fall some 50% (note I
have not verified), plus they have cut back their forecast out
building. Inventories are starting to build up. If one subscribes to a
doom-and-gloom forecast, housing bubbles have led to price declines of
an additional 40%.
- Inverted yield curve is disturbing ? In 8 of 9 times when the yield curve inverted, the economy has slumped into a recession within one year.
- New
chairman philosophically tends towards being a price-level setting
person, as opposed to one that takes a long-term view of the economy
first ? Price-level setting philosophies, involve having a target
inflation rate in mind, and then set the interest rates to obtain that
rate. In some countries, this policy is taken to an ?extreme? where
concern for other factors, such as unemployment rates, are ignored.
Wild cards in the U.S. include the fact that the international world is
less stable, and that long-term energy/oil impacts associated with
unstable countries (which may each comprise 5% to 6% of supply) should
not be ignored when pursuing price-level setting at the central bank.
So
all-in-all, the forecast for the U.S. economy over the next twelve
months was mildly positive, with some areas for attention. The March
meeting for the central bank will be key, as this will shed some light
on how the new Fed chairman handles his new role.
Which
brings me to my earlier about getting into Central Banker Heaven.
Greenspan has been praised by having all of the key skills and a
performance record:
- an ability to show independence from the administration and partisan views
- deep knowledge of history and economics (which both Greenspan and Bernanke share)
- inflation-fighting skills with a long-term view.
But
in some sense, while Greenspan has had all of these skills, it could be
argued that he also got lucky (being good and lucky is the best of all
worlds). During Greenspan?s tenure, he did not have to deal with
chronic problems. Now, Ben Bernanke has a tough and important job ahead
of him. He has a chronically unstable international world to deal with,
and he has to show his inflation-fighting abilities with a long-term
view that people like Greenspan so carefully considered.
I thank Alan Greenspan for his service. I wish Ben Bernanke the best of luck for our people and future generations.
Wednesday, February 8, 2006
Blogs In Management (Also Management Consulting Blogs?)
I just discovered the blog of management guru David Maister,
acknowledged as one of the world's authorities on the management of
professional services firms. I particularly like David's Fast Company
article from 2002, "Are All Consultants Corrupt?"
because it touches on topics that one needs to address regularly as a
management consultant, particularly about how can one ensure that one
produces services that one can be both proud of from an ethical point
of view and a quality of product perspective. To this, all I can say is
that one should leave the management consulting profession if ethics
and quality can't be met.
But the real purpose of this post was to point to David's post on internal blogs as a management tool. His text here gets at a real pain point linked to diseconomies of scale in management:
As
firms get larger, more dispersed and more complex, the disaffection of
partners (in professions and businesses of all kinds) is becoming more
evident. I get calls all the time enquiring about my availability to
consult on the issue of partners? unhappiness and their feeling that
they are treated like employees in an increasingly corporate culture.
I
am a believer that blogs can help with this sort of thing (essentially
flattening the communication structure associated with complex
organization structures). That said, blogs are not a panacea for
organizations and managers that do not know how to 1) use written
communications to complement the management style and 2) deal with the
semi-structured and dynamic nature of the blog medium. These latter
items are table stakes in my opinion, but they can be easily
underestimated.
In the comments section of David's post, I was also
encouraged to learn of a tip that Ernst & Young may be using blogs
internally. I have blogged before about consulting firms using/not
using blogs (e.g., here, here, here). It's good to hear of more activity in the consulting area and to learn of consulting/management blogs like David's.
Sunday, January 29, 2006
My Brief Notes On The Avian Flu
This past week I was researching some telecom reports, and I
happened to run across an outlier in the corporate mix that caught my
eye. It was a Gartner report, entitled "Prepare for Avian Influenza:
Our Interview With the World Health Organization's Dr. David Nabarro"
(sorry - subscription required).
Now I don't follow the management consulting and other firms that
specialize in risk management and human resources that closely, so I
thought I would check their sites out for a peek. Marsh has some
information on the avian flu here. AON has something over here.
Companies and organizations do not seem prepared. A survey by the
Deloitte Center for Health Solutions appears to indicate that 66% of
companies do not feel adequately prepared (poll of 179 companies).
Instapundit points out how hospitals could barely keep up with the
normal flu here.
When I step back from the business aspects and whether companies can
withstand prolonged labor shortages of 30%+, etc, I am a bit more
concerned that communities and families may not be prepared. At least I
find myself not quite fully informed to a level that hits close to
home, despite all of the press.
So I have started to make some mental notes from research reports,
like those from Gartner, that hit close to home. Maybe readers will
have other sources of info to share.
From the Gartner report (note Dr. Nabarro is the highest medical
authority, the U.N.'s top official for global pandemic response
planning), here are my key notes:
- "in the last 200 years, there have been pandemics at intervals
of every 30 to 40 years, on average" - so if even if one doesn't have
to be concerned about it, there could be an impact on one's children or
their children
- "modellers are [saying] that it may be as few as 21 days from the
initial appearance of the virus to it being a full-blown pandemic" -
note that the increased mobility of people shortens the cycle-time of
viruses spreading ; I ask myself, how and how fast would I personally
react once something hit the continent, country, or city I live in?
- Dr. Nabarro indicated he is not sure (because he doesn't know
enough about how corporations work) whether corporate CEOs should
assign senior executives to coordinate their response to avian flu
It seems the World Bank estimates
economic damage from an avian flu pandemic could cause $800 billion in
economic damage. To put that number in perspective, Hurricane Katrina
damages were estimated at $125 billion. A sickening of 90 million Americans as stated here - gee, that would be out of a population of 296 million Americans according to the CIA World Factbook.
My wife and I can barely control flu in the household between kids let
alone if one of every three people in the entire US is sick. What would
you do?
I suppose after writing all of this down, I am not more prepared for
an avian flu pandemic than I was before, but I do find myself at a
heightened level of awareness. That's probably at least one step
forward.
Update (1/29/06): As an aside, raders have choices of stockpiling N95 masks approved by the CDC or apparently, Kimchi (which I despise the smell and taste of).
Tuesday, January 24, 2006
Perceptual Mapping: What Does Your Cell Phone Say About You?
Last
week I was reading a detailed research report regarding cell phones in
order to get a more structured understanding of the consumer
marketplace as it relates to upstream B2B vendors.
Now
in business school, one may learn about concepts such as perceptual
mapping, a combination of numerical factor-analysis and marketing
technique that may be used to graphically place vendor products in a
two-dimensional chart, where the products may have many more underlying
features which actually makeup the products. Wikipedia has a sample
chart here,
to give you an idea of what perceptual maps look like. What is nice
about certain-types of perceptual maps is that the charts are borne out
of people?s actual market behaviors or expressed preferences (as
opposed to some ad-hoc or opinion-driven marketing method).
In
the report I was reading, there was a picture of a less-frequently used
perceptual map that grabbed my attention. Basically instead of
products, the perceptual map placed cell phone features (e.g.,
calendar, push-to-talk, text messaging) on a two-dimensional map with
the axes ranging from a) low- to high-technological advancement and b)
high-entertainment to high-utility.
Based
on the features (each a point) on this perceptual map, one could
identify five primary clusters of points. These clusters were
essentially viewed as market segments of mobile phone consumers and
were divided as follows:
- Picture people (camera phone lovers)
- Gotta-have-it-all types (e.g., Motorola RAZR types)
- Plain old telephone people (basic phone users)
- Organized telephone people (e.g., like calendar features in the phone)
- Always on-the-road types (e.g., like productivity & synchronization functions)
It?s
funny when you look at the high probability demographics for these
mobile phone segments (and I will take some liberties here to boil down
the paragraph of demographics to a few words (demographics match the
listing order above and have *not* been written to be politically
correct):
- females, without children, poor
- males, dumb, low income
- females, married, dumb, poor
- females, married, poor
- males, married, highly educated
I
fall into the organized telephone or plain telephone crowd with my
basic Siemens flip-phone. What does that say about me? I?ve never
really cared too much about image, but what am I communicating to
people by my use of phone? Is your ringtone a mating call in disguise?
What does your phone say about you?
Saturday, January 14, 2006
Leadership Is An Innate Skill?
I saw a recent post
that raised the question as to whether leadership skills are innate (and
cannot be learned). Leadership is a bit of an ill-defined term, so I?m
not exactly sure about the context of the original discussion
triggering the post, but at face value I have to say that innate skills
can help but instilling a continuous learning process about one?s own
leadership style (and that of others) can also help dramatically. What
I share below intends to illustrate not only that one can build
knowledge to help with leadership skills but also that one may find
little progress on a day-to-day basis until one day when it all comes
together.
Two
areas that created an ?ah-ha? for me with respect to helping me
recognize my leadership style were related to going to business school
and getting support from a client executive to develop the business
skills one of his line managers. Had it not been for these two events,
I probably would have turned out as an engineer focused on individual
contributor work as opposed to a person focused on business within the
technology space. While either of the outcomes is perfectly fine, I am
happier that I have found the business slant is more the ?natural me?.
The
first step in going to business school helped me to develop my
leadership skills by explicitly forcing me to focus on thinking about
and analyzing business issues, as opposed to passively addressing
business issues while working on the job. Business school also gave me
an extra level of confidence in knowing that I had spent dedicated time
to try to improve my knowledge.
The second step
may have occurred, in part, by chance. During a management consulting
engagement I was involved with, I was sitting in a three-person,
executive review meeting with one of the partners of my consulting firm
and the president of the company. The upshot of the meeting was that
one of the functional managers was not performing too well and both the
president and the partner wanted me to coach the functional manager to
help him take his management skills up by an order of magnitude or the
functional manager would be fired. What followed from there was some
behind the scenes work in analyzing how to approach the situation and
then direct assistance with the functional manager to improve the
business. After that particular client engagement, things started
?clicking? for me, and I was able to get into both interim and direct
management roles more regularly to foster my leadership skills.
The
upshot of all this is that combining knowledge, practice, and a real
environment to foster one?s management and leadership skills helped me
to breakthrough and reach a new level (one-time, discontinuous
improvement as opposed to gradual change). While the process of
improvement may have taken many years with slow growth, I was suddenly
able to get things to click together.
I have found similar discontinuous improvements in other areas of
life. For example, in tennis, I remember going to tennis camp and
getting a breakthrough on getting better control with my one-handed
backhand. In drumming, I started to study a completely different style
of music (jazz fusion instead of just progressive rock music drumming).
The knowledge had to sit for awhile, but one day it all clicked and
took me up a notch when I least expected it. If I hadn?t prepared for
the time when the conditions and environment were right, I wouldn?t
have reaped the benefits. Sometimes I think working on leadership
skills might be in the same vein.
Tuesday, January 10, 2006
CEOs Say Blogs Are Good Internal Communication Tools
Here's a study
that yielded results of 59 percent of CEOs finding internal blogging
tools useful for internal communications. From the article:
Of the 131 CEOs surveyed, 7 percent are actually blogging while many
others say they are unlikely to start a blog themselves. About 18
percent of these CEOs say they plan to host a company blog over the
next two years.
I am actually a little suprised that the percentage is so high in terms
of number of CEOs finding (intranet) blogs useful. I don't think that
59 percent of the population knows what blogs are, let alone that
they can be used within corporations. There must have been a percentage
of CEOs that didn't know what a blog was. If that is the case, it seems
like it would mean that much higher percentage of those that knew what
blogs were about thought they were useful.
In any case, I agree that blogs can be a useful communications tool
within companies. I just wonder if I am understanding the statistics
right and whether there may be some selection bias.
Wednesday, January 4, 2006
Improving the State of Corporate Blogging
As much as it pains me to agree with Jeff Nolan on his post about corporate blogging here,
I have to say that annecdotally I do not see an immediate tipping point
for corporate blogging. From my vantage point, I see at least a couple
of other factors contributing to the sad state:
- There are very few "skilled" bloggers in any position of authority within a corporation
- Despite the grassroots nature of blogging, people still need role
models for corporate blogging. Unless a company is actively supporting
blogging, there is a (tremendous) amount of baggage that blogging
(whether right) carries with it in a professional setting.
- Academic arguments on risk management are nice, but some
corporations need to gain extra comfort level with their abilities to
handle actual blog crises (or at least criticism in the blogosphere)
- Ask yourself, who in your organization is a role model for handling
this kind of stuff? Have they proven that they can take the heat (of
any temperature) in the blog environment or is it just conceptual? I'd
be surprised if people could name three people (off the tops of their
heads) in their companies that could "handle" the blogosphere. Again
whether right, I see it as a barrier to corporate blogging.
The environment and culture surrounding blogging sets the tone
within a corporation (case in point: Malcolm Gladwell's portrayal of
how crime in New York was reduced by eliminating graffiti and the
visible signs of vandalism).
One area that I am sensing positive feedback in the corporate
environment is around serious use of blog reading. Perhaps it is
because people can digest larger amounts of information in blog format
as opposed to reading traditional new sources. Perhaps it is because
they can glean leads and subtle insights from reading blogs. Or perhaps
it is related to the richer link content in blogs.
So if companies are not ready to encourage corporate blog writing by
actively seeking, reaching out to, and elevating the exposure of
skilled bloggers in their own organizations, I would suggest that they
support blog reading (and blog intranets as sandboxes at least). The
ROI on gaining industry knowledge from blog reading strikes close to
very immediately. I think that some managers are surprised by how much
their workers' level of knowledge comes up when they are encouraged to
read quality blogs, like Om Malik, Daily Wireless, and Mark Evans (to pick a few from the telecom space).
Tuesday, December 20, 2005
Some Observations on Intranet Blogging
One company that I've been spending some time at has an intranet blog
for its employees, but I see a few factors that inhibit adoption, and
these issues span both technology and culture:
- RSS feeds cannot be read using consumer versions of a feedreader like Bloglines or NewsGator for security reasons.
This means that most people (even junkies) have to revisit the site for
updates to comments and new posts. A bit of a drag ... you mean we have
to go to the corporate CIO to get NewsGator authorized for the
corporate Outlook software stack (I'm not picking on NewsGator btw)?
These kinds of things are just effort killers for intranet blogging
though ...
- Many corporate cultures view blog reading as a waste of time.
Evangelism is still needed to get blog reading accepted into a
corporate culture. If you can point an organization to a high-quality
blog in your industry, this goes a long way to dispelling the myth that
blog reading is a waste of time. In fact, people can get a lot of
consolidated information and synthesized analysis by reading blogs.
- Many corporate cultures still view corporate email, newsletters,
and enterprise systems as the means for handling, disseminating, and
using information. Things like wikis, social bookmarking, and blogs
are not well understood in terms of their productivity enhancing
aspects. When I recently showed someone how bookmarking tools could be
used on the Internet as the equivalent of Post It Notes, there was a
huge "a-ha event" that took place. We often tout tools in conceptual
terms and with respect to their Web 2.0 social aspects. In reality,
sometimes to get these tools to take, you simply have to show people
the money.
Do you see any other barriers to intranet blogging?
Update (12/20/05): Folks still trying to learn about social media in large corporations should check out Jeff Nolan's post
here.
Wednesday, November 30, 2005
Double Teaming Non-Profits Into Blogging
Michael Stein recently shared some of his thoughts on resistance to
blogging in not-for-profit environments (source in comments section here):
I have met a lot of resistance when I encourage my not-for-profit
clients to blog. I think one aspect of that resistance is that a
relatively small number of people enjoy writing and do it easily. I
think that "blogging evangelism" needs to include a component that
demystifies writing as a skill and provides resources to make new
bloggers feel competent about their writing.
I
thinks Michael's right on here. He also has a lot of good information
on non-profit stuff at his site. One post that caught my eye was a post
here that addresses non-profit bloggers and creating content.
I also resonate with Michael's comment about the need for "blogging
evangelism" within a non-profit organization. For example, even though
21Publish is deeply rooted in the core blogging platforms for Amnesty
International US and Amnesty International Germany, significant ongoing
evangelism is needed. Stefan recently posted a presentation he gave to
a broader audience of Amnesty International webmasters here.
This presentation is an example of the ongoing evangelism that is
required to get the various Amnesty organizations blogging successfully.
So I encourage folks interested in the non-profit space to continue
to double team on getting those non-profits to blog. That goes for you
too, Future MBA Girl (a blogger for two years now making a move to go to a management consulting firm focusing on the non-profit sector). People with your background can add value to non-profit endeavors while also increasing the number of management consultant bloggers out there.
Friday, November 18, 2005
Boogie Medien and 21Publish Partner To Launch Blog Community For Leading Low-Cost Provider Airline HLX
Boogie Medien has partnered with 21Publish to launch and manage an blog community for HLX,
one of the leading, low-cost provider airlines in Germany (likened to
JetBlue as I understand things - Stefan, why not Southwest?). Travelers
can now share their experiences on transit, destinations, etc. Stefan
posts more about it here. Congrats to HLX!
Blog communities are definitely something that companies with
inherent, sizeable bases of customers should consider (can also be
considered for small communities too, but ones with large communities
may simply be missing the boat if they don't give any consideration).
Consider the MBA blog community 21Publish launched for BusinessWeek, which draws from BusinessWeek's large online reader base. While an older Scoble post
has got me thinking about whether we should be calling communities like
these end-user generated content, participant-generated content, etc.
communities (I had to think twice about this 'cause I don't want to be
in the slave business!), in my mind companies are trying to use these
online presences to make things work both for the company and for end users
people. A loose analogy can be drawn to the sitting areas in Starbucks
- it is a nice way for companies to facilitate a conversation in a
loosely-defined but themed atmosphere.
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