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Be sure to visit my other WW—Ideal corporate culture

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Aside from tax rebates, has there really been strong economic advances under the Bush Administration?In its current issue, Business Week does a quick roundup of this so-called expansion,

“The expansion almost certainly ended in 2007, seven years after the previous peak in 2000. Unfortunately, this cycle has been lackluster, with real wages falling for many, economic growth slow compared with past cycles, and the U.S. getting a smaller share of the global pie.”

Here’s the pertinent info…

Global output: In order, China, India and Russia were the biggest winners in terms of world output, while Germany, Japan and the US (dead last) were the biggest losers. The US loss was more than three times Japan and four-and-a-half times Germany.

Median earnings: They were basically flat after adjusting for inflation. People with advanced degrees managed a whopping 2% increase as opposed to losses for all others.

Growth: U.S. growth averaged only 2.4% per year, nearly a full point below the average of the last two cycles.

What happened to you during this cycle?

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Gavin Cassar, a Wharton accounting professor, tested the prevailing wisdom of whether accounting techniques, such as budgeting, sales projections and financial reporting, would, in fact, help prevent business failures. In surprising results, he found that some accounting tools may actually lead them astray.

He found the culprit not to be the tools, but rather the MAP (mindset, attitude, philosophy™) of those using them.

I sent the article to a long-time CEO and thought you would find his comments interesting and useful. I’ve changed names to keep the examples he mentions anonymous, but note that CorpA was part of a Fortune 500 company and CorpB was public with sales of several hundred million with a CEO who had been around the block numerous times.

There’s only one important accounting problem described in this article. The other problems discussed are really problems in human psychology, such as being guided by hopes instead of realistic considerations and ignoring (widening) gaps between plans and results.

But the serious accounting problem described is the failure to collect and publish accurate and timely accounting information. If you have a carefully worked out budget, unless the monthly accounting figures are available quickly and are correct, the budget is useless as a planning tool because it’s impossible to really judge whether the company is on plan or not.

To some extent, both CorpA and CorpB suffered from this. Accounting was not held to high enough standards. Expenses were misclassified and weren’t posted in the months in which they were actually incurred. Managers initially tried to sit down with accounting and straighten out the discrepancies. But it was impossible, either because of poor accounting tools or probably just gross incompetence. After a time, managers stopped trying to correct the internal financial reports. They thought it was just wasting their time. They also stopped trying to control their expenses. Why bother? The financial reports were so inaccurate they didn’t show up even large and willful expenses outside budget limits.

So of course this led to increasing attempts by higher management to exert personal control over expenses. At one point, the CorpB CEO was signing all expense reports. You had to receive his personal permission to go on a trip or to even take a client to lunch. The budget meant nothing. And there was a line of managers outside his office asking permission to buy essential test equipment or fly an applicant in for an interview. Stuff that should have been decided instantly by the managers concerned was delayed, frustrated and often cancelled altogether.

Does your company provide timely accounting information to its managers?

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This time Jennifer at My Organized Biz started it, then it spread to Tom over at The 501 (c) Files and now (oh, be still my pounding heart) to me.

Another meme, this one asking what I’m going to do with my turn-the-economy-around tax refund.

I assume that Tom wants a response now, as opposed to when I stop laughing—sometime next century—so…

Simple answer—pay down debt. And I think (hope) the great majority of Americans will do the same and those who don’t might even <gasp> save it.

And here’s a really stupid idea for the idiots-in-the-Whitehouse-and-Congress, and those aspiring to be, to consider.

Stop spending on the rest of the world and try focusing on us—the poor idiots who pay your salaries.

Not the corporations, lobbyists and wealthy individuals who supply your election funds, but the rank-and-file who are stuck paying for your damn earmarks and offering up their sons, daughters and taxes to be killed in your stupid war; stop spending the majority of our hard-earned dollars in every country except ours and for causes that fragment rather than unites us. Stop spewing hate, lies and divisiveness to further your own ideological ends.

It’s not about you and the people you dine, visit and party with, it’s about us.

How ’bout going against convention and political expediency and actually try to make it part of the way up to the level of statesman.

OK, the rant is over.

In the spirit of memes and rampant curiosity I’d like to know what Denis at Digital Brikes, Steve at AbleBrains, Ron at The Wisdom Journal Casey at caseyross and Luke at Luke Says Moo plan to do with their refunds.

And what are you doing with your refund?

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In an excellent post on risk, professor, researcher and author Bill Buxton says,‘Entrepreneurs, like ice climbers, are often said to risk their necks. But there are ways to cut danger to sane levels—and some very good reasons to try’

People often comment that both groups are, politely speaking, nuts.

After offering up a detailed explanation of ice climbing he comments,

‘…the four considerations employed by the ice climber are exactly the same as those used by the serial entrepreneur or the effective business person…’

They are training, tools, fitness and partners.

Buxton ends by saying,

‘The most dangerous way of all to play it is so-called safe. Safe leads to atrophy and certain death—of spirit, culture, and enterprise. There is not a single institution of merit or worthy of respect in our society that was not created out of risk. Risk is not only not to be avoided, it is to be embraced—for survival.’

A quick and valuable read—whether you consider yourself a risk taker or not.

How do you handle the risks you take?

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Hey, folks, stop by My Organized Biz as more than a dozen b5 bloggers on give you their take on elegant simplicity in a sped-up world.

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The old believe everything; the middle aged suspect everything; the young know everything. — Fred Allen

I’m at that age where I know little and believe less!

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Growing older isn’t so bad when you consider the alternative — Maurice Chevalier

True, but I prefer the alternative to quantity without quality.

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It’s Sunday, folks, so get ready for another set of three quotes (posted at 6 AM, noon, and 4 PM Eastern Time). Astute readers will notice that I’ve changed the category to broaden the content. (I just couldn’t make myself ignore all the good quotes out there, let alone categorize them as stupid:)

The challenge is for you to respond with another quote on a similar or connected topic.

Ask a teenager, they know everything! — Anonymous

In spite of all that teenage angst!

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Post from Leadership Turn Image credit: christy and jun

Although the stats are Canadian, I doubt that they’re significantly different in the US or other countries.

The results of Waterstone Human Capital’s annual corporate culture study give an interesting insight on senior executive thinking when it comes to corporate culture.

“This year, a whopping 95% of executives said they saw a direct correlation between corporate culture and corporate performance — a 14% increase from two years ago and an increasing recognition by Canadian business leaders that corporate culture has a direct and tangible impact on the ability to achieve business goals.”

That’s how they talk, but here’s how they walk.

“Only 43% of executives told us they even bother to measure corporate culture… Only half of the senior executives we talked with said they were happy with their current culture.”

Compare that with Boston Pizza, which made Canada’s 10 Most Admired Corporate Cultures of 2007 list and makes a point of walking their cultural talk with both employees and franchisees.

They have “a three-year average revenue growth of 69.25% in an industry that typically sees growth in the 4% range and the TSX 60 Composite index had average growth of less than 17%.”

How?

“Success, says CEO Mike Cordoba, is all about following three strategic priorities: a commitment to franchisee profitability, to building the Boston Pizza brand and to continually improving the customer experience.”

“We hire great people and then we pay them for their success,” he says.

“Everybody from the receptionist up to the president gets a share in profits. Rewarding behaviours — and not just results — is a powerful way to align corporate culture with business strategy.”

That’s it, align strategy and culture, mix with a generous portion of vested self-interest and watch your business take wing.

Do you know what kind of corporate culture you have?

Is it aligned with your strategy?

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