2008年10月28日 星期二

Peter Drucker: a partial interview

The advent of the Internet has created a whole new corporate ballgame. Based on your knowledge of Drucker’s insights and management ideas (Drucker’s brain), how would he approach the management of a virtual company staffed by telecommuters such as yourself? Without management by sight, how would Drucker handle such aspects as human resources, personal relationships, etc? (By this, I mean a company without any central, brick-and-mortar location, with all communication and work performed via the Internet.)

What a great question! Drucker believed a great deal in responsibility and accountability. He once said, “All development is self development,” meaning that it is the responsibility of each and every person to make sure they got whatever training was necessary to excel in their jobs. If Drucker was the head of this virtual organization, he would take a great deal of time in each and every hire to make sure that he was hiring people with the strengths required for each position. He would also put in metrics to make sure that there was a way to measure the performance of each individual.

Lastly, he would hire a manager who had what it took to manage people from a distance (he told me he was “the world’s worst manager,” so he would hire someone else to manage the unit). This would be someone who had the maturity to care more about what was right than who was right, an individual who could make what he called the life and death decisions (know who to hire, fire, and who to promote).

Considering the trying times businesses are facing—tight and tightening margins, shrinking international markets, credit markets slowly coming out of the deep freeze, stock market wealth vanishing without a trace—what Druckerisms specifically apply to this market? What can companies do to survive while staring down the barrel of 1929? And how can they position themselves to take the offensive, not only now but as the recovery progresses?

What a timely question. Drucker felt that management was a “foul weathered job.” He felt that the leader’s most important job was to guide his or her organization through any kind of disaster: “The most important task of an organization’s leader is to anticipate crisis. Perhaps not to avert it, but to anticipate it. To wait until the crisis hits is already abdication,” asserted Drucker.

To get by in these difficult times would involve certain strategic moves. First would be a review of all product lines to make sure they still make sense for the business: Too many organizations have a hard time figuring out what to grow and what to abandon, as Drucker explained in 1982: “…a growth policy needs to be able to distinguish between healthy growth, fat, and cancer ― all three are ‘growth,’ but surely all three are not equally desirable.”

Drucker was telling managers to exercise careful judgment by abandoning the marginal: “Yesterday’s breadwinner should almost always be abandoned on a fairly fast schedule,” explains Drucker. It still may produce net revenue. But it soon becomes a bar to the introduction and success of tomorrow’s breadwinner.”

Which corporate heads strongly influenced Drucker in the development of his theories? And were any of those mentors later torn down to make way for newer theories?

As for practitioners, Drucker’s greatest influence was Alfred Sloan, the head of General Motors for a good part of the first half of the 20th century. Drucker spent most of two years studying GM in the early to mid-1940s, which led to Drucker’s first business book, Concept of the Corporation (1946). Drucker called Alfred Sloan the first “professional manager,” and credits Sloan’s segmentation strategy with unseating Henry Ford and his Model Ts. Sloan was a leader with character, maturity, and commitment, and made General Motors ─ which had been a bunch of smaller businesses strung together ─ one of the world’s greatest companies. Only in recent years has GM really faltered by continuing to make large gas guzzling SUV’s while Toyota ate their lunch with hybrids like the Prius. As a result of the recent financial meltdown, GM is in deep trouble and in stunning fashion, their stock has recently hit a 50-year low!

Laying aside your editorial and publishing background, what specific personal qualifications made you the best person to write this book?

As an author I have always recognized the need to write books that boil down large bodies of work into smaller, bite sizes of information that are easy to understand. This was particularly important with Drucker since he wrote so many books (38), with so many of them being difficult to navigate (he sometimes is repetitive and his writing style is not the simplest to follow). If someone wanted to learn about Drucker’s greatest ideas, where would they start? That’s where I come in. I was able to provide that starting point and pull out the fifteen or so seminal ideas from all of his works so that readers get a real sense of Drucker’s classical concepts, ideas, and strategies. Lastly, because I spent a full day with him and corresponded with him briefly, I was able to humanize him in a way no writer had done before.

You can learn more about Inside Drucker’s Brain and Drucker himself at www.insidedruckersbrain.com or www.jeffreykrames.com. The book is now available for purchase at Amazon.com.


Translation: English » Chinese (Traditional)
因 特網的出現創造了一個全新的企業比賽。根據您的了解德魯克的見解和管理思想(德魯克的大腦) ,如何將他的辦法管理一個虛擬公司配備了遠程辦公,如自己呢?如果忽視管理,德魯克將如何處理等方面的人力資源,人際關係等? (通過這一點,我的意思是公司沒有任何中央,磚和迫擊砲的位置,所有的溝通和工作通過互聯網。 )

真是一個偉大的問題!德魯克認為大 量的責任制和問責制。他曾經說: “所有的發展是自我發展” ,也就是說,它的責任是每個人,以確保他們有什麼培訓是必要的,以擅長於自己的工作。如果德魯克是負責這個虛擬的組織,他將大量的時間每僱用,以確保他僱 用的人的長處與需要為每個位置。他還希望建立指標,以確保有一個方法來衡量性能的每一個人。

最後,他將僱用一名經理了誰什麼了管理的人從遠處(他告訴我,他是“世界上最糟糕的經理, ”因此,他將僱用別人來管理的單位) 。這將是誰的人已經成熟到更加關心什麼是正確比誰是正確的,個別誰能夠他所謂的生死存亡的決定(知道是誰僱用,消防,誰促進) 。


什麼及時的問題。德魯克認為,管理是一種“犯規風化的工作。 ”他認為,領導者最重要的工作是指導他或她的組織通過任何類型的災難: “最重要的任務,一個組織的領導人是預測危機。也許沒有,以避免它,但預計它。等到危機安打已經退位, “斷言德魯克。

要 通過對這些困難的時候將涉及某些戰略舉措。首先將審查所有的產品線,以確保它們仍然意義的企業:有太多的組織很難搞清楚什麼增長和怎樣放棄,因為德魯克在 1982年解釋說: “ ...增長的政策需要能夠區分健康成長,脂肪與癌症-所有這三個是'增長, '但肯定所有三個不同樣不可取。 “

德魯克告訴經理小心判決放棄的邊緣: “昨天的養家糊口應該幾乎總是被拋棄了較快的時間表, ”解釋德魯克。它仍然可能產生的淨收入。但它很快成為一個酒吧的引進和成功的明天的養家糊口。 “


至 於從業人員,德魯克的最大影響艾爾弗雷斯隆是,主管通用汽車有一個良好的部分上半年的20世紀。德魯克的大部分時間學習兩年,通用汽車在初期至中期, 20世紀40年代,導致德魯克的第一個商業書籍,概念公司( 1946年) 。德魯克所謂的阿爾弗雷德斯隆的第一個“職業經理人, ”和信貸斯隆的分割戰略與推翻亨利福特和他的示範溫度。斯隆是一個領導者,性格,成熟,並承諾,並提出通用汽車公司─曾經是一群小企業串成─一個世界上最 大的公司。只有在最近幾年通用汽車真正動搖繼續向大型天然氣耗油SUV的豐田吃他們的午餐一樣與混合動力車普瑞斯。由於最近發生的金融危機,通用汽車公司 是在深麻煩和超炫的時裝,其股價最近創下50年來的最低水平!


作 為一個作家我一直認識到有必要寫的書籍歸結大型機構的工作納入小,咬大小的信息,很容易理解。這是特別重要的與德魯克寫道,因為他如此眾多的書籍( 38歲) ,與他們中的很多人難以瀏覽(他有時是重複的和他的寫作風格不是簡單的後續) 。如果有人想了解德魯克最偉大的想法,在那裡,他們會開始?這是我進來,我能夠提供的出發點和拔出15或開創性的想法,以便從他的作品使讀者得到真正意義 上的德魯克的經典概念,思路和戰略。最後,因為我花了一整天與他和與他相對短暫,但我能在他的人性化的方式已經沒有作家之前完成。

您可以了解更多有關內部德魯克的腦和德魯克本人在www.insidedruckersbrain.com或www.jeffreykrames.com 。這本書現已在Amazon.com購買。
Chinese (Traditional)

2008年10月22日 星期三

Chinese Suppliers Face New Wal-Mart Mandates

Chinese Suppliers Face New Wal-Mart Mandates

| | |
Wal-Mart Stores Inc. is hitting its Chinese suppliers with a slate of stringent environmental and safety mandates, just as the manufacturers face rising costs and dwindling demand for their products.

The world's largest retailer by revenue will issue the potentially costly dictums this week in Beijing at its first global supply-chain summit. The event is expected to be attended by hundreds of suppliers, nongovernmental organizations and Chinese government officials.

An apparel manufacturer said the company's targets 'could not have come at a worst time. What [Wal-Mart] needs to make clear is, who's paying? Us or them?'

Wal-Mart said it will phase in energy-efficiency requirements with its Chinese suppliers next year, and expand the program world-wide by 2010. Manufacturers that sell directly to Wal-Mart also must provide the retailer with lists of their suppliers. The companies should be able to recoup their costs 'by taking waste out of the system,' said Wal-Mart spokesman David Tovar.

The effort is the next stage in the Bentonville, Ark.-based company's three-year-old initiative to improve energy efficiency and cut waste across its more than 7,400 locations globally.

Wal-Mart said it will require third-party certification that suppliers are meeting all the safety, labor and environmental standards required by local laws. This summer, Wal-Mart began requiring outside audits of suppliers' labor-law compliance.

In addition, Wal-Mart said it is committing to make its 113 existing stores in China more environmentally friendly by reducing energy use at each store 30%, and cutting water use in half by 2010. Wal-Mart also plans to open a prototype store in China that will cut energy use by 40%.

Wal-Mart Chief Executive Officer Lee Scott, in a phone interview from Beijing, said he expects to hear objections from suppliers that find themselves under growing pressure from the rent economic downturn, as well as Wal-Mart's continuing expectation of lower prices.

Thousands of factories in southern China -- the world's primary source of low-cost goods -- have closed this year due to soaring costs and tougher environmental and labor rules, increasing public unrest in the nation. Earlier this month, thousands of laid-off workers demonstrated outside the gates of Smart Union, a defunct supplier to toymaker Mattel Inc. and Walt Disney Co.

'Some people's primary concern will be what will this do to cost?' Mr. Scott said. 'But when we rolled out our sustainability initiative at Wal-Mart we found that eliminating waste, downsizing packaging and improving transportation fuel efficiency led to a whole lot of savings.'

He added, 'I don't expect people to immediately jump off their chairs and say this is wonderful. There will be a healthy dose of skepticism on some people's part.'

Wal-Mart is taking a risk by making its environmental and efficiency goals in China public. Now, 'we have a measurable timeline to judge them,' said Julia Bovey, a spokeswoman for New York-based Natural Resources Defense Council.

Not all of Wal-Mart's demands will require suppliers to implement costly measures or buy new equipment, said Linda Greer, a director of the environmental advocacy group. 'There's a lot of low-hanging fruit,' she said, citing an assessment trip the group conducted this summer of Chinese textile factories. The group found that in some factories, 20% of goods produced were rejected as not up to quality standards, resulting in a lot of waste.

Mr. Scott said Wal-Mart will join with nongovernmental organizations, such as environmental watchdog groups, to monitor compliance. It will use its own internal inspectors, outside auditors hired by Wal-Mart and inspectors from the Chinese government.

Wal-Mart said if it denies a company certification, it will work with the company to see where it falls short and give it a period of time to come up to standards.

Chinese products have been riddled with safety issues in the past year, including the current tainted milk scandal, poisonous pet food and toys with high lead levels, among other problems.

By 2009, Wal-Mart will require some of its suppliers to provide the name and location of every factory they use to make their products. Mr. Scott said instituting 'an identifiable trail,' from raw materials to suppliers, will ensure that products are safe, in part due to concerns they will lose Wal-Mart business if they don't comply.

The company said it is aiming to eliminate customer returns due to defective merchandise by 2012.

In addition, Wal-Mart plans to join with suppliers to improve energy efficiency by 20% in the next four years at the top 200 Chinese factories it buys from directly.

In its own energy-efficiency initiative, a Wal-Mart store in northern Beijing boasts an array of energy-saving measures which, if proven effective, could eventually be rolled out throughout China, say executives. The store uses low-power LED (light-emitting diode) lighting that will reduce the store's energy consumption by 15%, motion sensors in low-traffic areas that shut off unneeded lights, and sliding doors on freezers that better contain the cool air than open-air models.

But the measures are still fairly expensive, say executives, who declined to give specifics. The 6,000 LED light fixtures had to be specially produced by supplier Honeywell International Inc., for example, as did the freezers by Sanyo Electric Co.

Ann Zimmerman / Mei Fong


| | |
爾瑪連鎖公司(Wal-Mart Stores Inc.)的中國供應商正承受著成本上升、需求下降的巨大壓力,現在他們又將面臨沃爾瑪提出的一系列嚴格的環保和安全規范要求。


Mei Fong/The Wall Street Journal

沃爾瑪表示,明年將分階段對中國供應商實施節能要求,到2010年把相關要求擴展到全球范圍。直接向沃爾瑪供貨的制造商還必須向沃爾瑪提供他們的供應商名錄。沃爾瑪發言人托瓦(David Tovar)說,這些企業應能通過減少浪費環節來彌補成本。




沃爾瑪首席執行長斯科特(Lee Scott)在北京接受電話採訪時說,估計新計劃會遭到供應商的反對;因近期經濟下滑,沃爾瑪不斷要求壓低供應報價,這些供應商承受著越來越大的壓力。

中 國華南地區是全球首屈一指的低成本商品生產基地。由於成本不斷飆升,環境和勞動法規日益收緊,今年以來該地區已有數千家工廠被迫關門歇業,加劇了社會的不 穩定因素。本月早些時候,數千名被解雇的工人聚集在倒閉的合俊(Smart Union)工廠大門外進行抗議,該公司是玩具制造商美泰公司(Mattel Inc.)及華特﹒迪士尼公司(Walt Disney Co.)的供應商。



沃爾瑪在中國公開提出環保和能效目標是個冒險舉動。紐約自然資源保護委員會(Natural Resources Defense Council)的發言人博韋(Julia Bovey)說,我們有一個可衡量的時間表來對他們作評估。

這 家環保組織的一位負責人格裡爾(Linda Greer)說,並非沃爾瑪的所有要求都需要供應商採取成本不菲的措施或購買新設備。她以今年夏季該組織對中國紡織企業所作的一次考察評估為例說,有很多 容易實現的途徑。他們發現,一些工廠有20%的產品因達不到質量標準被拒收,造成很大浪費。







在 沃爾瑪商店自身的節能計劃方面,沃爾瑪在北京北部的一家分店號稱實施了一系列節能措施;公司管理人士表示,如果實踐証明措施有效,可能最終會向大陸范圍內 所有商店推廣。這家分店採用了低耗電的LED(發光二極管)照明設備,能將店內用電量減少15%;在人流量較低區域採用感應裝置關閉不必要的照明燈;冷櫃 使用滑動門,比敞開式更能保存冷氣。

但公司人士表示,這些措施同樣成本不菲。他們拒絕提供具體數字,不過舉例說,6,000只LED照明燈和滑動門冷櫃就需要專門從供應商霍尼韋爾(Honeywell International Inc.)和三洋電機(Sanyo Electric Co.)分別定做。

Ann Zimmerman / Mei Fong

Bringing transparency to Buddhist funerals

Bringing transparency to Buddhist funerals


When novelist Saburo Shiroyama died in spring last year, fellow novelist Hiroyuki Itsuki wrote a eulogy in The Asahi Shimbun.

"Mr. Shiroyama once told me how impressed he was when the Jodo Shinshu Buddhist monk officiating at his wife's funeral not only asked for a fee that was quite reasonable, but even gave him a receipt," he wrote.

Itsuki went on to note that he could never forget the incredulous expression on Shiroyama's face as he recounted this episode. I recall reading this and thinking, "How like Shiroyama," who detested anything that offended reason.

I am sure many people have worried uneasily that they were being ripped off when making an ofuse (cash offering) to a priest at a funeral or memorial service. The appropriate amount is in the hundreds of thousands of yen, if not more--and you don't get a receipt.

In this day and age, such a transaction is a no-no even in the world of politics. There is no objective way to tell if the tacitly approved "going rate" really is appropriate.

Concerned that this sort of murkiness might have led to public distrust in the institution of Buddhism, about 20 young Buddhist monks in Tokyo recently formed an organization called Tera-netto Sangha (Temple network of followers of the Buddha) in Tokyo. One of its stated purposes is to try to restore faith in institutional Buddhism by explaining everything people need to know about the donations they make and where the money goes.

Daiki Nakashita, the group's 33-year-old leader, said that some funeral business operators have been "referring" Buddhist monks to their customers and pocketing kickbacks from the monks. The kickbacks, Nakashita explained, came out of offerings the monks had received.

In Buddhism, the deceased receives a kaimyo (posthumous name), and what kind of kaimyo the deceased receives usually depends on how much the bereaved family is willing to pay. Obviously, not all Buddhist temples are guilty of capitalizing on bereavement. But for a long time now, Buddhism in Japan has been viewed cynically as "the religion of funerals."

"Religion is not only for mourning the dead. It is also supposed to save the souls of the living," said Nakashita, who has been at the deathbeds of many patients in hospices.

Nakashita and his fellow monks intend to donate some of the offerings they receive to various charitable causes. I truly hope they will be like a fresh breeze to blow through and shake up the old order.

--The Asahi Shimbun, Oct. 20(IHT/Asahi: October 21,2008)

Peanut Butter on the Chin by James O’Toole

運用 PDCA, Bill 說戴明博士故事,「擦り合わせ」透明化(transparency)

Peanut Butter on the Chin by James O’Toole

運用 PDCA, Bill 說戴明博士故事,「擦り合わせ」透明化(transparency)

Peanut Butter on the Chin

by James O’Toole

What The Lucifer Effect, Philip Zimbardo’s landmark book on a prison experiment at Stanford University, tells us about the dangers of corporate conformity.

At company retreats in Aspen, Colo., over the last five decades, between skiing and spa-ing, corporate executives often attended performances at the Crystal Palace dinner theater. There, more often than not, they would implore the cabaret’s founder, Mead Metcalf, to sing his signature tune, “Peanut Butter on the Chin.”

Metcalf, who recently retired, claims he hated “the stupid song,” but couldn’t resist the shouted requests from a roomful of bigwigs. And it’s clear why they loved the ditty, whose main character is a corporate CEO who, in a rush to get to work, fails to clean his face after a hasty breakfast — and then passes the entire day with a lump of peanut butter on his chin. Of course, no one dares to give the boss a heads-up about the embarrassing blob. When he finally gets home after a busy day and takes his first look in a mirror, he is horrified by what he sees and concludes that he has made a fool of himself in the eyes of his minions. The song’s second stanza finds the CEO back in the office the following day. And, lo and behold, his entire management team sports lumps of peanut butter on the chin!

I thought about this lighthearted ode to corporate conformity while reading a much more serious account of the psychology that causes it: The Lucifer Effect: Understanding How Good People Turn Evil, Philip Zimbardo’s riveting — and chilling — account of the prison experiment he conducted at Stanford University in 1971. Older readers likely have at least heard something about this storied psychology experiment that quickly got out of hand. Young men had been assigned to play the roles of guards and inmates in an ersatz jail in the basement of a campus building, but the participants took their playacting so seriously that the scheduled two-week experiment had to be aborted at midpoint when the student-guards began to psychologically and physically abuse the student-prisoners. Zimbardo’s book is the first detailed, popular account of what happened. The retelling was prompted by the torture of Iraqi detainees by U.S. military grunts at the Abu Ghraib prison in Iraq in 2003, a bizarre and terrible incident that eerily replicated the earlier experiment.

In the book, Zimbardo’s goal is to understand why good people do bad things — to unravel the psychological and social sources of evil. He begins with a nearly 300-page, day-by-day account of all that transpired during the hellish experiment in 1971, and follows it with a review of the real-life horrors that occurred in Nazi concentration camps, the My Lai massacre during the Vietnam War, the cultish mass suicides at Jonestown in 1978, and the more recent genocides in Rwanda and Darfur. He reanalyzes these familiar events in light of two decades of research into the psychology of evil and the emotional causes of the worst manifestations of human behavior. In the process, he turns what we thought we knew about the subject on its head.

For years, experts had asserted that people do bad things because that is the inherent human condition; something in our DNA compels us to give in to the persistent temptation in life to do wrong. Zimbardo believes this assumption has no merit and uses his Stanford experiment and hundreds of subsequent psychological studies to disprove it.

Zimbardo’s prison experiment at Stanford demonstrated that human behavior is determined not by nature but by situational forces and group dynamics — the nurture, as it were, of our jobs and relationships, groups we belong to, and daily interpersonal interactions. Almost all of us can be drawn over to “the dark side,” where good people can end up participating in out-of-character, unspeakable activities, given either a large dose of peer pressure or some arm-twisting (obvious or subtle) by individuals we view as superior. In The Lucifer Effect, Zimbardo shows how easy it is to create situations and systems in which people are driven to do bad things by the nature of what’s around them. He highlights, for instance, the phenomenon known as groupthink, which occurs when all members of an organization become so inward-looking they fail to recognize that the assumptions driving their behavior are false, outmoded, or even self-destructive. But he concludes on a hopeful note: We can just as readily design systems and group behavioral models that lead to positive actions.

Letting Information Flow
Although Zimbardo mentions business organizations with only a passing reference to the WorldCom, Enron, and Arthur Andersen accounting and corporate governance scandals of the past decade, his general conclusions illuminate the source of unethical company behavior more adequately than do most of the published analyses specifically addressing that topic. His observations belie the standard explanation offered by business leaders when people in their organizations are caught misbehaving: Hey, there are a few bad apples in any barrel. Zimbardo argues that, in fact, ethical problems in organizations originate with the “barrel makers” — the leaders who, wittingly or not, create and maintain the systems within which participants are encouraged to do wrong. Hence, instead of companies wasting millions of dollars on ethics courses designed to exhort employees to “be good,” it would be far more effective for managers to make an effort to create corporate cultures that reward people for doing the right thing all of the time.

Zimbardo’s conclusions are important for business leaders not simply because they explain the behavior that leads to costly debacles like the Enron scandal. More immediately, they shed light on the organizational pressures to conform and the reluctance to speak the truth to supervisors and others in power that the CEOs in Aspen found so hilariously familiar in “Peanut Butter on the Chin.” These same forces hamper a company’s capacity to innovate, solve problems, achieve goals, meet challenges, and compete.

Research shows that successful organizations need a free flow of information, much as the heart needs a continuing supply of oxygen-bearing blood. For example, organizational theorists Robert Blake and Jane Mouton documented in one study that the ways in which airplane pilots interacted with their crews determined whether the crew members would provide essential information to the pilots in the midst of an in-air crisis. Stereotypical take-charge “flyboy” pilots who acted immediately on their gut instincts were far more likely to make the wrong decisions in trying to avoid disaster than were the more open and inclusive pilots who, in effect, said to their crews, “We’ve got a problem. How do you read it?” before they made up their minds on a course of corrective action. In essence, the silent crew members knew from experience that their leaders were not going to listen to them, wouldn’t listen even if they volunteered useful information, and, worse, were likely to reprimand them if they dared speak out of turn. It’s a matter of trust, and it is the leaders themselves — and their organizations — who suffer most in untrusting cultures. By not listening to their colleagues, too many leaders shut out sources of potentially useful information. That’s why transparency is simply good management.

Indeed, there is only one effective antidote to organizational opacity and groupthink: creating organizational transparency — a culture of candor in which information flows unimpeded to those who need it when they need it, and in which no one fears the consequences of being forthright and honest with those above him or her in the company.

The potential benefits of transparency are, on the one hand, quite tangible. Edward Lawler, a professor at the University of Southern California Marshall School of Business and founder and director of USC’s Center for Effective Organizations, has found, for example, that posting everyone’s salaries on a company bulletin board or in a database boosts employee morale and increases trust in top management. Equally important, however, are the less obvious gains that transparency offers. When executives gratefully welcome information or suggestions from those down the line — even stories that perhaps they don’t want to hear — organizational perspective is broadened and groupthink is marginalized. In practical terms, the information those at the top need at any given time may be located anywhere in the organization, and that’s why clear channels of communication are a sine qua non of organizational effectiveness.

Yet, despite the apparent value of transparency, few companies can be characterized as transparent. (Indeed, 63 percent of the Midwestern executives I recently surveyed described their companies’ cultures as opaque.) As Zimbardo demonstrates, transparency runs against the grain of human organizational interactions. In all groups, there is a powerful desire to belong. Everybody wants to be liked, to be part of the family. Hence, the pressure to conform in groups is almost irresistible. Nobody wants to be the one to tell the boss that he misused a big word during an impromptu speech or that he is hopelessly mistaken about a set of facts.

At the top of the hierarchy, leaders understandably try to hide their mistakes; they hope to prove that they are smarter than those below them and, hence, don’t need their underlings’ input. At the same time, information is the most precious currency in most organizations. Leaders horde it and share it only grudgingly; fast-trackers, golden boys, and members of A-teams view information as a perquisite of their positions. Thus, some in the organization are in the know and will always get heard, while others are left out, their ideas squelched to the detriment of the entire organization, including, paradoxically, the insiders themselves.

Corporate leaders who recognize the importance of transparency take practical steps to create cultures of candor. Some practice “open-book management,” as pioneered by SRC Holding’s CEO Jack Stack, who provides employees with full access to company financial and managerial data. Others, like Kent Thiry, CEO of health-care provider DaVita, systematically collect data and solicit candid feedback from employees, former employees, customers, and suppliers in order to, as Thiry puts it, keep from “messing up.” Still others use Weblogs to give voice to the expertise at the bottom of the organization; reward employees who offer up their honest assessments freely; use formal exercises to challenge the organization’s basic assumptions about its commercial environment and stakeholders; and diversify membership in the C-suite to gain the benefit of multiple perspectives. Above all, these leaders adopt the first rule of information: “When in doubt, let it out.”

Author Profile:

James O’Toole, the Bill Daniels Distinguished Professor of Business Ethics at the University of Denver’s Daniels College of Business, is coauthor (with Warren Bennis and Daniel Goleman) of Transparency: How Leaders Create a Culture of Candor (Jossey-Bass, 2008).

Investor Sheds a Major Stake in Ford

Investor Sheds a Major Stake in Ford

Published: October 21, 2008

DETROIT — One of the biggest boosters of the American auto industry said Tuesday that he was bailing out of his large stake in the Ford Motor Company — a stinging no-confidence vote that raised the anxiety level in this city over the deepening troubles of the Big Three car companies.

By starting to sell off his $1 billion bet on Ford, an investment that is now worth less than $300 million, the financier Kirk Kerkorian joined the growing ranks of investors who have soured on Detroit’s prospects because of plummeting sales and mounting losses.

Mr. Kerkorian’s abrupt decision to back away from Ford comes just six months after he began building his stake. It also follows an effort by the private equity firm Cerberus Capital Management to try to sell Chrysler to General Motors after spending $7.4 billion a year ago to acquire the smallest of the Big Three automakers.

G.M. and Cerberus need banks and other investors to provide financing for the deal. But the tenuous state of the industry has made prospective investors, so far, hesitant to back the merger.

“Conditions in the industry are so perilous they are scaring away even the most fearless investors,” said John Casesa, a principal in the automotive consulting firm Casesa Shapiro Group in New York.

The stocks of the two publicly traded American auto companies have plunged over the last year — G.M.’s has fallen more than 80 percent, and Ford’s is down 75 percent.

With the specter of bankruptcy now hovering over the Big Three, the likelihood is increasing that the companies will appeal to the federal government for more financial assistance.

“It’s reaching a point where we’ll have to decide if we’re willing to let the U.S. auto industry fail,” said David Cole, chairman of the Center for Automotive Research in Ann Arbor, Mich. “It depends on the urgency that the government feels to save these companies.”

The failure of General Motors, Ford and Chrysler would have far-reaching economic and social consequences.

Together, the automakers employ more than 200,000 workers in the United States and provide health care and pensions to more than a million Americans. In addition, their operations are lifelines to 20,000 auto dealers and countless suppliers, and the source of major tax revenue to states and local governments.

Investors have been fleeing the stocks of G.M. and Ford since the spring, when high gas prices shifted consumers’ tastes away from the big sport utility vehicles and pickups that were Detroit’s most profitable offerings.

Since then, a weakening economy has frightened many shoppers away from dealer showrooms, leading to billions of dollars in losses for the car companies in the weakest auto market in 15 years.

The financial crisis on Wall Street has accelerated the downturn. Because of tighter credit standards by the automakers’ finance arms and other lenders, some prospective new-car buyers have been unable to get loans, further choking off sales.

Overall auto sales have slumped 12.8 percent in the first nine months of the year, but G.M. sales have dropped 17.8 percent, Ford’s by 17.4 percent and Chrysler’s by 25 percent.

The decline appears to be accelerating this month, prompting analysts to further cut their forecasts for the industry.

The research firm J. D. Power & Associates recently predicted that United States sales this year would total 13.6 million vehicles, a decline of 16 percent from a year ago, and said 2009 sales could fall as low as 13.2 million.

G.M. lost $18.8 billion in the first six months of the year, and Ford lost $8.6 billion. Chrysler, because it is privately owned, does not report its financial results.

The losses, however, are not as alarming to analysts as the rate at which G.M. and Ford are using up their cash reserves.

Both companies are said to be burning through more than $1 billion in cash a month. Despite almost constant cuts in production and jobs, the automakers are unable to reduce costs fast enough to offset declining revenue.

G.M. and Ford have repeatedly stated that they do not consider bankruptcy protection as an option. And some analysts, for now, say the talk of Chapter 11 filings is overblown.

“General Motors and Ford are both likely to survive, but we now see higher 2009 cash burn rates,” said a research report published Tuesday by JPMorgan Securities.

The cash crisis could prompt the auto companies to seek help from the federal government after the Nov. 4 presidential election.

Washington recently financed a $25 billion loan program to help the automakers develop fuel-efficient vehicles that meet new federal mileage standards.

Some industry executives, declining to be named, said they expected Detroit to request more financial aid.

Senator Carl Levin, a Democrat from Michigan, said Tuesday that Washington should be prepared to help the auto industry in the same way it rescued the banking industry.

“I would think that most people understand the importance of the automobile industry as a whole to the industrial base,” Senator Levin said. “Clearly we’ve got to be ready to act if and when the situation gets to such a point that the additional support needs to be available.”

Executives at G.M. and Cerberus, Chrysler’s parent, say they believe they can help their two companies avoid such a fate by realizing substantial savings as a single entity. In addition, their combined cash hoards could help them through an economic downturn while they bleed cash. If a merger does occur, the combination will most likely result in thousands more job cuts. The talks, which began more than a month ago, were said to be continuing Tuesday, according to people with knowledge of the discussions.

At Ford, the sell-off by Mr. Kerkorian underscores how quickly the industry’s fortunes have spiraled down. The 91-year-old billionaire investor had previously amassed major stakes in G.M. and Chrysler, only to dump his holdings after conflicts with management.

But Mr. Kerkorian and his top deputy, Jerome York, appeared to have a much higher opinion of Ford’s prospects when he first began accumulating its shares in April through his Tracinda investment arm.

“Tracinda believes that Ford management under the leadership of Chief Executive Officer Alan Mulally will continue to show significant improvement in its results going forward,” the company said in a federal filing.

Mr. Kerkorian and Mr. York were said to be even more enthusiastic about Ford’s outlook after a meeting in June with Mr. Mulally and William C. Ford Jr., Ford’s executive chairman and leader of its founding family.

But the steep slide in Ford’s stock has made Mr. Kerkorian rethink his commitment.

On Tuesday, Tracinda said it had sold 7.3 million Ford shares for $17.7 million, and “intends to further reduce its holdings of Ford common stock, including the possible sale of all of its remaining 133.5 million shares.”

Mr. Kerkorian currently owns a 6.09 percent stake in Ford, worth about $290 million at Tuesday’s closing price of $2.17.

Ford executives were said to be stunned by the move. Analysts speculated that the abrupt resignations last week of two of Ford’s outside board members may have contributed to Mr. Kerkorian’s waning confidence in the company.

A Ford spokesman, Mark Truby, declined comment on Mr. Kerkorian’s decision.

“Questions regarding Tracinda’s investment decision should be directed to Tracinda,” Mr. Truby said. “We remain confident in and focused on our plan to transform Ford into a lean global enterprise delivering profitable growth for all.”

In its statement, Tracinda said “current economic and market conditions” prompted its move to reallocate resources from Ford to Mr. Kerkorian’s interests in the casino and oil and gas industries.

Nick Bunkley contributed reporting.

2008年10月19日 星期日

Web Data Offer New Slant on Traditional Horse Race

Web Data Offer New Slant on Traditional Horse Race

The first real "Internet election" has produced an explosion of statistics that has overwhelmed political junkies used to relying on more traditional measures of campaign success, such as polling and fund-raising.

Measuring an 'Internet Election'

"It's unprecedented," says Kevin Wallsten, a 31-year-old professor of political science at California State University in Long Beach. "We don't have the capacity to really measure and cope with it all."

Among the gusher of new data: Sen. Barack Obama, the Democratic presidential nominee, has nearly four times as many Facebook supporters as his Republican rival, Arizona Sen. John McCain. On some days in recent weeks, Sen. McCain had more blog mentions than Sen. Obama. More people overall have watched the Illinois Democrat's online videos, but on average, Sen. McCain has attracted more viewers per video released by his campaign.

But are these numbers useful?

Christine Williams, a professor of government at Bentley University in Waltham, Mass., thinks they are, particularly during the nomination process when candidates struggle to emerge from the pack.

For example, one big difference between the performances of Sen. Obama and Sen. Hillary Clinton during the Democratic contests earlier this year was Sen. Obama's better showing in caucuses. These grassroots affairs require more ground-level interaction with voters, who need encouragement not just to vote but to attend the more time-consuming gatherings where views are discussed.

Sen. Obama's victory in Iowa, the first contest, shocked pundits and turned the Democratic race upside down. "If people had been taking Obama's Facebook numbers more seriously, they would not have been so surprised when he won the Iowa caucus," says Ms. Williams.

She found that candidates with the most Facebook supporters and blog mentions before the caucuses -- Sen. Obama topped the list -- won the most votes. That correlation with votes was much higher than for more-traditional gauges like polling, fund-raising and media attention, her study showed. In primaries, which require less of a grassroots effort, more-traditional measures foretold the winners.

facebook.com; fivethirtyeight.com

Barack Obama has nearly four times as many Facebook supporters as his rival; fivethirtyeight.com uses polling data innovatively.

"Everyone understands that caucuses are different," says Ms. Williams. "But Hillary wasn't paying attention to what you had to do differently to win them, and that they could change the outcome of the nomination." Sen. Obama had a much larger and more decentralized organization on the ground in Iowa than did Sen. Clinton.

Political scientists think this election will change the way people look at Web-generated data, no matter the outcome. Already, the availability of these figures has spawned an industry of so-called Web analytics, whose usefulness in political campaigns is only just beginning to be understood.

TubeMogul, a Web analytics firm in Emeryville, Calif., has tracked since before the primaries the number of times official campaign videos have been watched on a daily basis. More viewers overall have watched Obama campaign videos 93% of the days since the beginning of the year, but the McCain campaign gained the upper hand for several days in early August when it made fun of Sen. Obama's celebrity, linking him in a video to Britney Spears and Paris Hilton.

But perhaps more useful to campaign advisers and pundits are details about who is watching those videos. One way to assess that is to look at who is commenting on the videos at sites like YouTube. While male commenters predominate on videos for both candidates, Sen. Obama's tend to attract a significantly higher percentage of female commenters than Sen. McCain's, according to TubeMogul, a sign of the Illinois senator's strength among women voters.

Still, the meaning of some of these figures is hardly a sure thing. Watching a video about a candidate doesn't necessarily signify support for that candidate.


"How many of the viewers who watched the YouTube versions of the Rev. Jeremiah Wright's speech were Obama supporters trying to understand what the fuss was about?" says David Weinberger, a fellow at the Berkman Center for Internet and Society at Harvard University. "And how many were working up a righteous anger against Obama?"

While watching a video indicates some level of interest, signing up as a supporter of one of the candidates on their Facebook or MySpace page suggests a higher level of engagement -- and possibly the first step toward volunteering for a candidate.

The Obama campaign, with its legions of organizational volunteers, "has been brilliant about taking that offer of support and turning it into something that used to cost a lot of money," says Zephyr Teachout, the director of online organizing for Howard Dean's 2004 presidential campaign and now a visiting law professor at Duke University.

Even things like Google searches are instructive, according to Nate Silver, whose Obama-leaning Web site fivethirtyeight.com has gained a following for its innovative use of polling data. He says such metrics are similar to nominating contests like Iowa and New Hampshire, as early indicators of candidate strength.

A paucity of Google searches about Republican candidate Rudy Giuliani suggested he "wasn't creating any early buzz online, and that was a leading indicator of his demise," says Mr. Silver.

Write to Christopher Rhoads at christopher.rhoads@wsj.com

2008年10月12日 星期日

Wolfgang Gerke:财主犯错 穷人遭殃

文化社会 | 2008.10.12

专访德国金融权威:财主犯错 穷人遭殃

他是德国银行和证券学权威之一,曾长年在大学执教。现担任巴伐利亚金融中心主席,也同时是企业管理杂志的出版人之一。沃尔夫冈-盖尔克 (WolfgangGerke)著有多本专业图书和以自己名字命名的盖尔克交易所专业词典。作为银行和证券学专家,盖尔克频繁出镜,是德语平面媒体,电台 和电视台经常采访的业内专家之一,也因此广为人知。

美 国金融危机的波及范围不断扩大,德国中国都难以幸免。一时间有关“大难当头”的报道铺天盖地,人心慌乱。原本计划与德意志银行首席经济师瓦尔特 (Norbert Walter)先生畅谈此事,不想在约定时间里,录音间里的设备出现故障,错过了专访时间。绝望之中,只要向多方发出求救信号。素不相识的盖尔克是其中 一。我心里知道,自己不过是在“垂死挣扎”,在如此短的时间里约名人专访几乎已没有可能。好在盖尔克的秘书善解人意,将上司的手机号码给了我,要我亲自联 系,因为盖尔克日程安排已满。绝望和无奈中,我硬着头皮拨打了他的手机号码,慌乱中留言,只记得我当时恳请他在百忙中抽时间接受我的专访。不想三个小时 后,手机铃声响起,远方果真传来了盖尔克先生的声音……


盖尔克 教授:我们遇到了自二战结束以来最严重的金融危机,所以形势的确不容乐观。当然,媒体的报道和某些股票交易商的反应未免过于夸张。无可否认,尤其是美国, 许多人投资决策失误,尤其是在房地产领域。但我们目前所经历的一切更多的是一种惊慌后的反应。所以有必要指出,实体经济的确受到波及,企业的订单和合同减 少了,但不能因此就断言,这将导致世界经济危机。


盖尔克 教授:的确如此。当然造成这种局面的原因绝不是人们的凭空想象,而是实实在在的财产损失。但问题的严重性与媒体的报道存有差距。当某种感知被传播开来后, 它就会产生一定的影响。所以欧洲央行行长特里谢呼吁人们谨慎行事。我想说的是,人们的确应该三思而后行,千万不得莽撞行事。


盖尔克 教授:我认为,与世界其他国家相比,德国受到的影响相对来说是比较小的。德国是一个经济强国,出口强劲,德国制造的产品极具竞争力,当然我们也能感受到经 济发展速度的放缓,明年的经济增长预测将有所下调。但从总体上来说,经济发展有自己的周期,德国的经济现状好于欧洲许多其他国家,德国的价格结构也相对合 理。简言之,美国的金融危机对德国造成了影响,经济增长率将有所下降。



盖尔克 教授:从某种角度来看,不能说两种立场完全不矛盾。我认为,各国间应协调彼此间的立场,只是这并不意味着每个国家都采取同样的做法,而是应在各国采取措施 的基础上进行协调。德国联邦政府不认为有义务替其他国家解决问题。各国应首先自扫门前雪,之后再在此基础上,讨论帮助他国的问题。但现在就发出建立欧洲统 一基金,解决各国银行问题是一个错误的信号。我认为,银行出了问题的国家应自行解决问题。在必要情况下,再谈合作事宜,现在还没有发展到这个地步。

德 国之声:不过,事实是,无论哪国银行陷于困境,国家都得扮演大救星的角色。前不久,德国总理和财长就亲自出马,宣布为德国储户提供担保,让大家放心。但从 某种角度上来说,这种做法反倒让人放不下心。您认为,这样的政府担保是否仅限于安抚人心的作用呢?它在摆脱金融危机的过程中是否真的能够发挥应有的作用?

盖尔克 教授:德国联邦政府的担保是非常现实的,尤其是从心理学的角度来说,当然绝不仅限于此,事实是,现在人们尚不能排除国家真得出钱相救的可能,就如同英国一 样,但必须明确纳税人所承担的框架。国家必须为陷于困境的企业,比如HRE银行等注资,使其国有化,必要时,国家的担保将转变为HRE银行的自由资本,便 于日后在市场上寻求买主。






德国之声:您认为,谁应该为此次金融危机承担责任? 是银行高管,政府还是整个金融体系?

盖尔克 教授:我个人认为,对美国金融危机承担责任的首先是美国总统布什和美联储前主席格林斯潘。他们共同为伊拉克战争出资,鉴于中国以巨额外汇储备购买美国国 债,也间接参与其中。他们俩人还有意使美元保持疲软,迫使产油国提高产油量。在经济繁荣阶段,美国政府和美联储故意调低利率,鼓励人们贷款,告诉人们,存 钱毫无意义,造成了通货膨胀,促进次贷业务的繁荣兴旺。所以布什和格林斯潘应承担最大的责任。


盖尔克 教授:发生这场辩论是一个必然的结果,因为社会体系受到了质疑。如果某种社会体系不符合百姓的利益,那么它就无法长久地保持下去。现在的资本主义就是这 样,它正面临考验。几年前,我就曾表示,很有可能会发生一场反对资本主义的革命。总之,这场辩论会继续下去,关键在于,这场危机会持续多久。从世界经济危 机中曾出现了极端的政治派别和理念。我希望,历史的悲剧不要重演。


德国之声:在这场金融危机中,中国也受到波及。只是人们对中国受影响的程度存有不同意见。当中国国家总理温家宝到访美国时,曾明确表示,帮助美国摆脱危机符合中国人民的利益 。您认为,中国正在扮演怎样的角色?

盖尔克 教授:中国受到的冲击超出了它的预计范围。美联储的政策导致美国对中国负债贬值,对中国非常不利,就好比企业向银行借钱,之后说,我无法偿还,这对中国来 说是一笔亏本生意。另外,中国向美国和欧洲大量出口自己的产品,一旦这两个市场出现萧条,中国自然会受到影响。 好在中国幅员辽阔,经济发展快速,中国人的消费水平也在不断提高,扩大内需,开辟国内市场是中国减轻受危机影响程度的关键所在。






盖尔克 教授:多年来的经验证实,美国称雄世界的格局将逐渐结束,新兴工业国家凭借其高经济增长率将对美国的霸主地位提出挑战,其中不仅包括中国,还有印度,巴西 等。另外值得关注的是俄罗斯的发展走势。从资源角度来说,俄罗斯与中国不同,俄罗斯是一个资源丰富的大国,但中国政府更明智地意识到让百姓参与经济发展进 程,分享成果的重要性。俄罗斯则远没有做到这一点。





2008年10月11日 星期六

A Conversation With Peter Drucker( 1997, Tom Davenport)

A Conversation With Peter Drucker

In 1997, author and professor Tom Davenport spoke with management icon Peter F. Drucker about the state of reengineering, information management, the psychology of managers and the role of technology in business.

May 08, 2007CIO — In the past 10 years, companies have learned that information has the power to drive their businesses. This has caused tremendous change to such fundamentals as strategy, organizational structure and market reach.

To explore these developments with some historical perspective, we brought together two big thinkers on business and information management. Last spring, Tom Davenport --director of the Information Management Program at the University of Texas at Austin, CIO columnist and co-author of Information Ecology: Mastering the Information and Knowledge Environment (Oxford University Press, 1997) --visited professor Peter F. Drucker at his home in Claremont, Calif. Drucker, one of the world's most noted authorities on corporate management and professor at Claremont Graduate School, introduced such innovative ideas as the rise of the knowledge worker and the transition from assembly line to flexible production and empowerment. The pair weigh in on the state of reengineering, information management, the psychology of managers and the role of technology in the last few years of the 20th century.

Davenport: What do you think about reengineering? Did something go astray?

Drucker: Yes, obviously --two things. One is that the father of the term, [Michael] Hammer, realized that one could make a great deal of money by asserting that you could learn to reengineer your company in a three-day seminar, provided you paid enough. The other problem is that reengineering became associated with wholesale firing. And in a way, Hammer and [James] Champy, [who together wrote a manifesto on reengineering,] were not guilty of it, but in order to sell it, they did imply that you would need fewer people.

Reengineering is a way of seeing the processes of the firm. You always need to reallocate people because you change the processes. But I am not sure that even the majority of reengineering cases require fewer people. You may need fewer of one kind and more of another.

Davenport: Maybe the problem was that reengineering got too popular for its own good. I'm not sure anything could have lived up to that level of expectation and hype.

Drucker: Reengineering became the bandwagon, and everybody jumped on it. Now many have jumped off. Predictably, there will be a lot of companies that will quietly keep on doing it and then in six years will know how to do it. Maybe we should give the child another name so that nobody remembers.

You may say it was oversold; I say it was overbought. [Hammer and Champy] tried to find clients who were going to make the world over in three days. [Reengineering] will come back. How soon I don't know. But within 10 years for sure.

Davenport: Why is American management so fashion-conscious?

Drucker: Insecurity. We've been caught in a period of very rapid change; the feeling is that there must be a right answer. But also, thinking is very hard work. And management fashions are a wonderful substitute for thinking.

When Frederick Taylor sold scientific management, he insisted that [companies] hand over the management of the plant, and he ran it with his own crew. Evangelists [believe they] have the answer, and I think Taylor didn't know that other answers existed. Same with [W. Edwards] Deming, whom I knew very well. I could never convince Ed that total quality management is for manufacturing. It works where there is production work and no place else.

Each evangelist is quite sure that his own patent medicine cures everything. And it's very hard to get management to ask, "Is this for us?" There is no universal medicine. The stuff that is good for my arthritis would not help me at all with a broken leg, even though it's in the same general area.

It also, I think, bespeaks a systemic behavior of adolescents. Compared to [managers], a 15-year-old is a conservative.

Davenport: You think managers are adolescents? In what sense?

Drucker: They yield to peer pressure. If a fellow CEO on the golf course says, "We are using this, and we wouldn't do without it," you have to do it, too. The last 20 years have been very unsettling. Executives really don't understand the world in which they live. But bandwagon psychology is nothing new. When I was growing up in Vienna, everybody felt the need to be psychoanalyzed. And there was a time when every child older than 4 years had to have his tonsils out. So this is not confined to management.

Davenport: How harmful are fads such as reengineering for the management of organizations?

Drucker: I think the reengineering craze was a tiny little boom compared to sensitivity training. Reengineering did very little damage compared to sensitivity. However, I think the evangelists, as I call them, have peaked.

Davenport: I think you're right: There's a bit of backlash against evangelism. One of the reasons I admire your work so much is you've never really been an evangelist for any single thing.

Drucker: No. I was taught at an early age that you make the diagnosis before you operate. And nine times out of 10, when you make the diagnosis, you don't operate. You just wait. You're going to have to put that foot in a cast and for six months try not to step on it. But American management has been no more fad-conscious than any other. Japanese and European managers have been just as oriented to fads.

Davenport: It's somewhat reassuring to know it's not just a problem in our culture.

Drucker: The search for the one quick fix is a universal human failing.

Davenport: You've been writing about managing information for quite a long time --20 or 30 years. Do you see progress toward information-based organizations and effective information management in organizations?

Drucker: There has been real progress in software and hardware [development]. There is unbelievable software now for operations. Last April, I was in Boston and spent a little time with friends at the Harvard University Medical School and its teaching hospitals. I looked at some of the medical software now available. In the past, all the surgical resident ever saw of an operation was a surgeon's back because he sat up above and observed. Now you have virtual software that actually enables that resident to do the surgery and see the results. I have a grandson who studies architecture. About 60 cents of the dollar in every nonresidential building goes toward utilities, communications and so on. The software to design not what the public sees but what makes the building function is incredible. And the same is true --though it's more work --in manufacturing and operations.

Davenport: I agree. In my work with companies on their business processes, I have yet to find a major operational process that hasn't been transformed by the use of information technology. But how about management? Has that been affected as much?

Drucker: No. Let's go back. In the 1950s and early '60s, when I began to work with computers, we were all convinced that new availability of data would have an enormous impact on how the business was run. And this isn't what happened. I [never met] the senior manager who knew what information was available for decisions. Very few senior executives have asked the question, "What information do I need to do my job?" In part because they've all been brought up with the accounting information that they understand. But the other type of information system, they don't understand.

The information you need the most --and not just in business --is about the outside world, and there is absolutely none. It doesn't exist. You'd be surprised how much outside information about customers and noncustomers companies simply do not have and, in many cases, cannot get. And yet, you don't make your decisions on what goes on inside the company; you shouldn't, at least.

Managers have come to rely heavily on the computer's information. And you cannot put into the computer data that you don't have. Both executives and students think you tell the computer to get the data, and the computer gets it --no. You have to get it yourself. And because of the plethora of inside information that the computer spits out day in and day out, a very large number of executives spend all the time with these internal figures.

Davenport: You've argued that the best way to get external information is to get out of the office and work directly with customers, as Alfred Sloan [of General Motors] did.

Drucker: If you wait for reports, the delay is always six months. And information about the outside is obsolete quickly, especially today when technologies crisscross, and markets and distribution channels change four times a week. The only way you can get outside information is to go out with your customers and not play golf with the other vice presidents. When a salesperson goes on vacation for two weeks, take his or her job. At least you get to know your customer. You still don't know the 75 percent of your market that is not your customers. But at least you know a little bit. A brilliant CEO of a large high-tech company says, "If I want to find out what's going on, I ask my 13-year-old daughter. She knows much more than I do because I sit in an office all day."

Davenport: Somebody once said that attention is the real currency of the information age. Isn't the success of many companies dependent not only upon having the information but also upon paying attention to it?

Drucker: Absolutely. There are lots of companies that insist on getting copious reports, but they are worthless in most cases. You can get an enormous amount of statistics in developed countries, but you have to believe that the information is relevant to you.

Go back to the early '30s. Nobody in Europe had ever worn a ready-to-wear suit; there were tailors who made suits [for individuals]. And then in 1931 or '32, a fellow by the name of Montague opened a chain of men's clothing stores called the Fifty-Shilling Tailor. When I mentioned the Fifty-Shilling Tailor to a client in that industry, he said there was no point in looking at it; none of his customers would ever go there. That client doesn't exist anymore; it deserves not to exist. It's not always absence of information; it is also tunnel vision. Of the two, I think tunnel vision will take a good deal longer to overcome.

Davenport: Do you think it's reasonable for one person within an organization to be the czar of all information? Not only the kind of information that comes through a computer but also in textual form and the kind of information you get through going out and being a car salesman for a couple of weeks. Or is that too much for one role?

Drucker: I'm reasonably convinced that within 20 years or so most businesses will have an information executive who will be in charge of both the traditional accounting system and the new information systems.

Davenport: What industry do you think has been affected the most by the information revolution?

Drucker: The biggest impact will be on knowledge industries such as education and medicine, which are in great need of increased productivity. The impact on education will be profound, but first there will have to be a critical mass of technology in the classroom. Soon we will have some sort of desktop-access machine --it is unlikely to be a regular PC --as standard equipment in classrooms. There are also revolutionary applications involving simulation in medicine and software for maintaining and repairing equipment in the military. Of course, some of these same capabilities are being used in businesses.

Davenport: I'm sure you are familiar with the figures suggesting that up to half of capital expenditures are for some type of information technology. Do you think that IT has become the growth engine of our economy?

Drucker: I beg your pardon. The fastest-growing industry in our economy is management consulting. One of the most important things for managers to learn is when and how to use consultants. But don't kid yourself. You do need computer technicians.

The computer industry is where the automotive industry was in the 1900s. Now the pattern is for computer vendors to sell you people as well. It is reminiscent of when J.P. Morgan bought a Rolls-Royce, and the company told him that he had to have a driver supplied by them. Morgan brought an antitrust suit against Rolls-Royce so that he could use his own driver.

Davenport: I would argue that technology and its management is becoming somewhat commoditized, even though it changes rapidly. So it can be outsourced. Do you think the trend of outsourcing the management of technology will continue to grow?

Drucker: It will grow because if you work with many different companies, you become an expert. "Practice makes a master" is an old proverb. If you don't do it day in and day out, the hand very quickly loses its cunning. And whenever I have analyzed an organization, there may be half a dozen things they do day in and day out where one can expect them to meet the stiffest performance standards. They have 16 things they do once in a great while --not just in technology but also in nontechnical areas such as advertising. I think it was around 1900 or 1910 that businesses found out that you need somebody who does nothing else but advertising, and you need somebody who has more than one client so that he learns by being exposed to different patients or different plants.

Around the '50s, a great medical clinician was in Boston, and his name was Kiefer. He's the man who introduced antibiotics. And I still remember Kiefer saying in a meeting after President [Franklin Delano] Roosevelt had been dead five or six years, "If Roosevelt's doctor had had other patients, Roosevelt would still be alive." Roosevelt was a very sick man, and he had a brilliant Naval internist who had only one patient. And you learn by having 25. You may have noticed that I have a bad knee. Eventually, if I live long enough, I will need a knee replacement. [When I do], I'm going to go to somebody who does at least 60 a year and not to somebody who has looked at two.

Davenport: Do you think that we have benefited from the great pace of technology introduction in our society? I personally feel that our ability to use the stuff advances far more slowly than our ability to create it.

Drucker: There is a lot of room for new technology in the world. But I very much doubt we need more speed. We don't use the speed we have. A young pianist was brought to [Johannes] Brahms, who was very impressed with his talents. So Brahms sent him to his patron in Vienna. The patron turned the young pianist down, telling Brahms, "I have no interest in someone who plays the minute waltz in 56 seconds." In terms of technology, we have people trying to play it in 56 seconds when it shouldn't be played at all. Very little of our computing capacity is well used. We need instruments that are simple and cheap. Even most laptops are much more capable than what people need.

Davenport: Do you believe that American companies, maybe American society in general, is too technology-oriented?

Drucker: The time has come for us to shift from the "T" in IT to the "I." It's time to learn the balance if there's to be information focus. Don't get me wrong. I'm interested in the technology. I consider myself knowledgeable about it, but compared to my 16-year-old grandson, I am a moron. You know, his generation is very different from the CEOs you have now because they didn't grow up with making the machinery work.

The Writings of Tom Davenport
Davenport has had a few worthy things to say as well.

Process Innovation: Reengineering Work Through Information Technology (Harvard Business School Press, 1993)

Considered the first book on reengineering, it is more conservative than its primary competitors on the difficulty of reengineering and how much time and money it requires. Despite its subtitle, this book is as much about people and organizational issues as it is about technology. It includes two chapters on technology and one on information.
Reengineering the Organization (with Richard Nolan, Sirkka Jarvenpaa and Donna Stoddard) (Harvard Business School Press, 1996)
This collection of Harvard Business School cases and research notes on reengineering is a good guide to how reengineering has actually been performed in organizations.
Information Ecology: Mastering the Information and Knowledge Environments (Oxford University Press, 1997)
Based on research on more than 50 companies, this tome maintains that the technology-oriented approach to information management has been a failure. Davenport argues for a broad new approach involving not only technology but also such human-oriented domains as information culture and behavior, information politics and information staff.
Working Knowledge: Managing What Your Organization Knows (with Laurence Prusak) (Harvard Business School Press, forthcoming)
Scheduled to be published in November 1997, this book addresses the pragmatic issues associated with managing knowledge, including codification strategies, knowledge management roles and responsibilities, knowledge technologies and managing knowledge projects. It also features detailed examples of companies that were early adopters of the knowledge management concept.
© 2008 CXO Media Inc.

2008年10月5日 星期日

Greenwich Time

Op-Ed Contributor

Greenwich Time

Published: September 27, 2008

Be aware that your correspondent is merely bringing you the news when he reports how many people have besieged the author of “The Bonfire of the Vanities” over the past week with the question, “Where does this leave the Masters of the Universe now?”

“This” refers to the current credit panic. The Masters of the Universe is a phrase from that book referring to ambitious young men (there were no women) who, starting with the 1980s, began racking up millions every year — millions! — in performance bonuses at investment banks like Salomon Brothers, Lehman Brothers, Bear Stearns, Merrill Lynch, Morgan Stanley and Goldman Sachs. The first three no longer exist. The fourth is about to be absorbed by Bank of America. The last two are being converted into plain-vanilla Our Town banks with A.T.M.’s in the lobby and, instead of Masters of the Universe, marginally adult female cashiers with wages in the mid-three figures per week, stocked with bags of exploding dye to hand the robbers along with the cash. American investment banking, the entire industry, sank without a trace in the last few days.

So where does this leave the Masters of the Universe? In Greenwich, Conn., mainly. The hottest, brightest, most ambitious young men began abandoning investment banking in favor of hedge funds six years ago. Your correspondent can describe scenes of raging carotid-aneurytic anger as the young hotshots resigned. Security goons seized them by the elbow and marched them off the floor at six miles an hour. They couldn’t touch anything in or on their desks — not even the framed picture of Mom and Buddy and Sis, propped upright from behind by little cardboard wings covered in synthetic velvet — so furious were their superiors. Their biggest producers and future leaders were walking out on them.

Greenwich is the center of the Masters’ hedge-fund world, replacing Wall Street. For five years, the heart of Wall Street, the fabled Floor of the New York Stock Exchange, has been gradually emptying out. A hundred years ago, the Floor was a club for gentlemen oligarchs. Only men with social credentials could have one of the insider “seats” on the Floor. By last year, when your correspondent paid his one and only visit to the Floor, one member came up to another and informed him that he, like so many others recently, was leaving the Exchange for good.

“What will you be doing?”

“I’m joining the Fire Department.”

“The Fire Department? In what capacity?”

“I’ll be a firefighter. The pension plan is awesome.”

Incidentally, there are no seats on the Floor, none that this correspondent ever saw. The Exchange is already an anachronism, like Broadway. Everything is done by computer today. Hanging out on the Floor of the Exchange is like hanging out at OTB. Broadway and the Exchange are like the first thing you see when you enter Disneyland in California. You find yourself in a turn-of-the-last-century town with a trolley and an apothecary and a barber shop. That’s Broadway and Wall Street today.

It may dash your hopes for that nice warm feeling called Schadenfreude, but the Masters of the Universe are smarter than the people they left behind at the investment banks. Their hedge funds have blown up here and there, but unlike the investment banks, they are still very much in business. They have hurriedly pulled themselves into defensive positions inside their shells, like turtles. Their Armageddon, if any, will not come for two more days, which is to say, Tuesday, Sept. 30.

Most hedge funds open up a crack on Sept. 30, Dec. 31, March 31 and June 30 to give investors the chance to “redeem” their investments, meaning take their money out. These moments are called gates, like a series of gates in a prison. The gate is the limit, the fixed percentage of your money, that the fund will allow you to take out at one time. Even with these strict caps on withdrawals, some funds may end up nothing but shells.

Shed no tears for the Masters of the Universe, however, not that your correspondent actually thought you might. Most of the young Masters already have their own personal nut free and clear. “Nut” is the term for the amount of money you need salted away in weather-proof investments in order to generate enough interest to live comfortably in Greenwich on Round Hill Road, Pecksland Road or Field Point Road in a house built before the First World War in an enchanting European style, preferably made of stone featuring the odd turret, with a minimum of five acres around it and big enough to be called a manor. Every Master of the Universe knows the number.

Tom Wolfe, the author of “The Bonfire of the Vanities,” is at work on a novel about immigration in Miami.

The Lost Tycoons By RON CHERNOW

Op-Ed Contributor

The Lost Tycoons

Published: September 27, 2008

With breathtaking speed, the world of large Wall Street investment banks has vanished. Fabled firms, some more than a century old, have been merged out of existence (Bear Stearns, Merrill Lynch), gone bankrupt (Lehman Brothers), or sought asylum as commercial bank holding companies (Goldman Sachs, Morgan Stanley). Why on earth did this happen?

The death of Wall Street has been a long-running, slow-motion crisis, barely discernible to participants who had still booked huge profits in recent years. Beneath the razzle-dazzle of trading desks and the wizardry of esoteric finance lay the inescapable fact that these firms had shed their original reason for being: providing capital to American business.

The dynastic power exercised by Wall Street tycoons in the late 19th and early 20th centuries was premised on scarce capital. Only a handful of European countries and their private bankers had surplus capital to finance overseas development. In this cash-poor world, J. Pierpont Morgan and other grandees exerted godlike powers over American railroads and manufacturers because they straddled the indispensable capital flows from Europe. With their top hats, thick cigars and gruff manners, these portly tycoons scarcely qualified as altruists. As Morgan liked to warn sentimental souls, “I am not in Wall Street for my health.” Yet he and his ilk rendered America an invaluable service by reassuring European investors that they would receive an adequate return on their investments, securing an uninterrupted flow of capital.

To safeguard those returns, old-line investment bankers became all-powerful overlords of their exclusive clients. When they issued company shares, they retained a large block for themselves. Some clients chafed at these gilded shackles, while others gloried in their servitude. As the head of the New Haven railroad, a Morgan client, boasted to reporters, “I wear the Morgan collar, but I am proud of it. If Mr. Morgan were to order me tomorrow to China or Siberia in his interests, I would pack up and go.”

In the sunless maze of Lower Manhattan, the old Wall Street houses were miniature temples of finance. Elite, all-male and lily-white, rife with snobbery and bigotry, they didn’t bother to hang a shingle outside, and the tacit message to pedestrians was clear: keep on walking. This reflected the banks’ patented formula of serving only the most creditworthy clients: industrialized nations, blue-chip corporations and wealthy individuals.

In London, these small partnerships were called “issuing houses” because they issued stocks and bonds but didn’t trade or distribute them. In their risk-averse culture, J. P. Morgan and his breed considered the stock market a faintly vulgar place, better left to Jews and assorted ethnic groups outside the top ranks of investment houses. This bias would later give predominantly Jewish firms like Lehman Brothers and Goldman Sachs a marked competitive edge. Even in the 1920s, patrician Wall Street firms stayed somewhat aloof from the stock market mania.

Securities laws during the New Deal, mandating fuller disclosure of corporate accounting, eroded the Wall Street moguls’ power. The new transparency reduced the need of many companies for a banker’s imprimatur to certify their soundness. The Glass-Steagall Act of 1933, which forced full-service banks to choose between commercial and investment banking, further shrank the investment houses’ influence.

After World War II, as capital markets revived, Wall Street investment banks remained tiny partnerships with outsize power over corporate America. Morgan Stanley demanded exclusive banking relations with the cream of corporate America: AT&T, General Motors, United States Steel, General Electric, DuPont, I.B.M. and Standard Oil of New Jersey. The essence of the business was still the traditional underwriting of stocks and bonds. The era’s emblem was the solemn, rectangular “tombstone” ad in newspapers for share offerings, listing the dozens of firms involved, with Wall Street’s rulers in the top tier.

Underwriting bred a sociable culture of “relationship” banking in which a smooth golf swing, Ivy League credentials, glib patter over a martini and family connections counted for more than financial ingenuity. Firms didn’t advertise and paid publicists to keep them out of the press. They disdained hostile takeovers, stock trading and other activities that might threaten their coveted underwriting business. And they enforced more rules of etiquette than a debutante’s ball. It was considered bad form to poach an employee or raid another firm’s client. Whatever their flaws, these elite firms still played a vital role in the economy, floating stocks and bonds to create new factories and businesses.

The old Wall Street began to die a lingering death in 1979 when I.B.M. told Morgan Stanley that it wanted to have Salomon Brothers co-manage a $1 billion debt issue. Fearing that its stable of captive clients would likewise revolt, Morgan partners insisted on sole management of the issue. They were flabbergasted when I.B.M. sent back word that Salomon Brothers would be lead manager for the issue.

What accounted for this startling shift? For the first time since the heyday of J. P. Morgan, traditional corporate clients had outgrown their bankers. With Europe and Japan devastated by World War II, American companies had enjoyed unrivaled supremacy in world markets. They had grown big enough to finance expansion from retained earnings and had many more borrowing options than before. Many had developed their own financial subsidiaries with triple A credit ratings and scarcely needed Wall Street bankers to vouch for their solvency. Trading firms like Salomon Brothers and Goldman Sachs were using their prowess to cultivate relations with powerful institutional investors like pension funds and insurance companies, eating into the profits of white-shoe houses. Underwriting deteriorated into a low-margin business as traders trumped blue-blooded bankers in the Darwinian struggle.

The demise of traditional underwriting would create in the coming decades a vacuum filled by a host of volatile, risky businesses. The cozy world of relationship banking yielded to the brutal world of “transactional” banking. Stock, commodity and derivatives trading, hostile takeovers, leveraged buyouts and prime brokerage for hedge funds required ever-larger balance sheets, forcing investment houses to become huge, publicly traded companies. Firms that once remained distant from the stock market were now its storm-tossed creatures, as investors demanded ever-higher profits amid cutthroat competition, forcing bankers to take risks that would have horrified their Wall Street ancestors.

Where the old Wall Street stuck to the most prestigious clients, the new Wall Street engaged in an unseemly rush to the bottom. Investment houses that once dealt only in grade-A bonds became swept up in junk bond mania in the 1980s. Firms that once snubbed companies beyond the Fortune 500 flocked to Silicon Valley in the 1990s, eager to take fly-by-night companies public. And, in the final reductio ad absurdum, Wall Street during the past decade gorged on mortgage-backed securities, tying its fate to America’s least creditworthy borrowers. Addicted to colossal amounts of leverage, the onetime arbiter of scarce capital had become the most profligate borrower.

The large investment banks that once allocated precious capital now exist in a world awash with money, crisscrossed by capital flows from many continents, with financial markets deep and liquid as never before. Once the current crisis is past, investment banking services will eventually flourish again inside diversified financial conglomerates. Stripped of excess leverage and more tightly supervised by regulators, investment bankers may even rediscover the old-fashioned virtues of corporate finance. And small boutique firms will continue to offer trusted advice as of old. But the storied investment houses of Wall Street, trailing their glorious past, have now earned tombstone ads of a very different sort.

Ron Chernow is the author of “The House of Morgan” 這本中國有翻譯 and “Alexander Hamilton.”