Monthly Archives: December 2008

Stefan Stern

It is too late to avoid the now-deepening recession. But it is not too late to learn important lessons from 2008, and resolve to do better next year. Here are five thoughts to bear in mind in 2009.

Dare to be different

Boring old Lloyds TSB. For years sector analysts and journalists have hammered away at the UK retail bank, criticising it for its apparently turgid performance. Why hadn’t it pulled off a really big deal like some of its British competitors? Why did it take such pride in its conservative strategy? And why hadn’t it joined in properly with all the subprime fun in the US? Didn’t it know there was easy money to be made?

The critics are not so vocal now.

Lloyds TSB, while not exactly unscathed by the financial crisis, has seized its moment and (with government help) grabbed HBOS, its formerly much bigger rival. It took nerve to resist all that carping. Not so stupid.

The remainder of the article can be read here. Please post comments below.

Stefan Stern

I am writing this brief note in an unsurprisingly quiet FT office on Monday morning. The world moves on and there is a newspaper to get out, but on December 29 there is a certain unreality to it all. (Not if you live in Gaza, of course. Life is all too real there just now.)

Some colleagues may be grateful for the chance to get out of the house and renew their relationship with their computer screens. After a few days at home during the intense carousing of Christmas, the office may seem pleasingly calm and ordered.

So welcome back to work, those of you who have made it.

You may now agree with my friend Richard Herring, who has observed that there ought to be a Second Law of Relativity: “Time passes more slowly if you spend it with your relatives”.

Stefan Stern

When you pick up the Companies and Markets section of the Financial Times and find, without even getting beyond the front page, that:

a)  a record number of M&A deals have been pulled in the past year, a 29 per cent fall on 2007 levels, and

b)  Toyota is to suffer its first loss in 70 years, and

c)  Caterpillar, the US manufacturer, is to cut top salaries by up to 50 per cent and those of senior managers by between five and 35 per cent,

then you know it is time to stop.

We could all do with a break. (John Varley, chief executive of Barclays, certainly could. He told the BBC’s Robert Peston this week that the banks are facing “a public relations crisis”. That may be so – but they also face a real, banking crisis too. PR matters. So does reality.)

A merry Christmas to all management blog readers. Back here on December 29.

Stefan Stern

Usually I would hesitate before taking issue with Larry Summers, the former Financial Times columnist and soon-to-be chair of the National Economic Council for Barack Obama, US president-elect. I feel certain that his grasp of economics is firmer than mine.

But on one specific point I find I must challenge him. Prof Summers once observed that: “In the history of the world, no one has ever washed a rented car.” The remark has always been seen, rightly, as a telling insight into the nature of ownership.

But on Saturday July 3 2004, at a self-service car wash on the outskirts of the Italian city of Pisa, my wife and I shattered Summers’ first law of rented cars. Reader, we washed one.

The remainder of the article can be read here. Please post comments below.

Stefan Stern

Oh the disappointment. You receive an e-mail from one of the world’s greatest business schools, telling you that you have been accepted into next year’s full-time MBA course.

And then – disaster. It turns out that the e-mail was sent in error. You and 49 other sorry MBA wannabes have been misled. All you can do now is cry into your cornflakes.

This is the sad tale of the Kellogg school of management at Northwestern University in Evanston, Illinois. The school has made sure that Christmas 2008 is one that 50 young people will never forget.

Over 5,000 aspiring MBA students applied last year for the two-year Kellogg course, steeling themselves for annual fees of $46,791. The only consolation for the 50 rejected candidates is getting their $235 application fee back.

MBAs tend to become even more popular in downturns. That investment banking job has gone – why not spend the severance pay on upskilling and increasing your employability (and market value) just in time for the recovery? That’s the business logic, anyway. I’m sure the unlucky 50 will find another academic home somewhere else.

But you really do have to be careful how you break news to people. Remember the time that Cohen dropped dead in the office, and Shapiro was sent to pass on the tragic information?

He approached the Cohen household and knocked at the door.

“Widow Cohen?” he asked, as the door opened.

“Waddya mean ‘widow’?!” cried the startled and indignant lady. “I’m Mrs Cohen! I’m not a widow!”

“Wanna bet?”

Stefan Stern

Last week the Hay Group, a management consultancy best known for its work on pay and rewards, published a report on the failure of chief executives to execute strategy effectively. Out of the report’s main recommendations, one stood out: design better pay and incentive schemes. I wonder who might be able to help out with that?

Hay’s report was called “Make or Break – how leaders keep promises in business”, and on first sight it makes unhappy reading for chief executives. It contains a survey of 100 senior managers who are working just below board level at FTSE 350 companies.

And, goodness me, they are not impressed with their leaders. Almost four-fifths of them say they do not think their businesses will hit the targets set by the boss. A third do not understand the chief executive’s strategy well enough to carry it out. Over a quarter disagree with the messages coming from the top, finding them unrealistic. A fifth of them are just plain bored.

The remainder of the article can be read here. Please post comments below.

Stefan Stern

Wharton professors share their thoughts on the implications for the corporate governance debate in the current financial crisis.

An unexpected (and unexpectedly sentimental?) outbreak of support for General Motors from William Kristol in the New York Times.

An unflinching message from Lucy Kellaway about the new realities of work in 2009.

And finally, advice from Dilbert (aka Scott Adams) in Fortune magazine on how to save your job.

Stefan Stern

So – what sort of a 2008 has it been for you? Any exciting plans for the new year?

These apparently harmless questions have turned out to be a rather unwise conversational gambit during this year’s party season.

Redundancy, that more-or-less silent assassin, has been moving among us. There have been a lot of sudden, unwelcome taps on a lot of unsuspecting shoulders.

Some people have been (temporarily) spared. But for how long? You can hardly blame anxious professionals for throwing themselves into this year’s Christmas parties with an even greater sense of desperation than usual.

Desperation is what it can take to cross the threshold of yet another “festive”, alcohol-fuelled gathering. There is all that standing around to put up with, talking too loud, staying up too late, eating too much ludicrous, fancy-schmancy food.

At this time of the year you understand what Philip Larkin meant when he described, with dread, what his social life held in store for him:

“I could spend half my evenings, if I wanted,
Holding a glass of washing sherry”
(from Vers de Société)

Which is not to say that I can’t enjoy a couple of glasses of (decent) wine with friendly and entertaining colleagues every now and then, even when it’s cold and dark outside and you’d really rather have been home a couple of hours ago. I do like a good party. But why do so many of them seem more like work than play?

Humbug. For many people, this year’s Christmas party motto has been: “Drink, scoff, cackle – for tomorrow we start looking for a new job.”

Stefan Stern

What really happened at Western Electric’s Hawthorne Works site in Cicero, Illinois, between 1924 and 1932? We may never know for sure. The evidence from its experiments is disputed, and any conclusions drawn from them remain controversial.

What we do know is that big claims are still made for the “Hawthorne Effect”, the idea that small changes to people’s working conditions can improve their performance. (A more sceptical interpretation is also possible. Maybe workers just do better when their managers are paying attention.) Some see the Hawthorne Effect as a Big Idea. Others regard it as a bit of a joke.

The proof of a big idea is in its execution. Some colleagues and I are currently carrying out a mini Hawthorne experiment of our own. I am writing this column at my temporary desk, located in what the office planners have called a “swing area” (not as exciting as it sounds).

The remainder of the article can be read here. Please post comments below.

Stefan Stern

About the authors

Stefan Stern writes a column on Tuesdays on management. He is winner of the 2010 Towers Watson award for excellence in HR journalism, and has previously won awards from the Work Foundation and the Management Consultancies Association.

Ravi Mattu is the editor of Business Life, the FT's management features section, and a former editor of the Mastering Management series. He joined the FT in 2000 from Prospect magazine

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Elsewhere on Lucy Kellaway

Lucy Kellaway writes a column on Mondays on work , poking fun at management fads and jargon and celebrating the ups and downs of office life. She is also the FT's Agony Aunt.

Elsewhere on Luke Johnson

Luke Johnson writes an FT column on Wednesdays on entrepreneurship. He runs Risk Capital Partners, a private equity firm, and is chairman of the Royal Society of Arts.

Elsewhere on Dear Lucy

Lucy Kellaway, FT columnist and associate editor, offers her solution to your workplace problems in a column in the Financial Times. In the online edition of her Dear Lucy 'agony aunt' column, readers are invited to have a say too.

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