Morality and public companies…..can they really coexist?

September 18, 2010

I’ve been thinking about personal responsibility and how this ties in to those of us who run businesses, large and small.

I find that most of the time those who run and own their business will operate with much more integrity, authenticity and morality than those who run businesses for others, but are not major shareholders in that business.  Public companies are a great example of businesses that often are run with anything but integrity.

I believe the reason for this is the lack of personal responsibility and accountability that exists in most public companies.  At the end of the day those who are in senior management rarely if ever have to pay for bad decisions on a personal basis.  In fact, many times they are sent away with a huge golden parachute that allows them to move to their next venture being financially independent.

We have a problem with morality in large organizations whether they be in the private sector or government.  Both are charged with working in the best interest of the shareholders or the public.  Too often we find the leaders of these organizations did not work in the best interests of their stakeholders.  In the financial management world we often are asked to be a fiduciary for our Clients.  The same is or at least should be true with public corporations as well as government.

Unless there is a personal price to pay, we won’t see any significant changes.  When the leaders of these organizations get caught doing unethical things, they usually don’t pay a personal price  If they ruin their company, they just leave and sit on the sidelines to re-appear in another company within a few months.

Greed is not good, although many in our society think it is.  Being morale pays off.  For those in small companies the owners know this from first hand experience.  If they don’t run their companies with integrity, eventually their business will go away and they go out of business.  If this happens the owner pays a huge personal economic and psychic cost.  In the public realm this doesn’t happen.

Until we can figure out how to hold the people who run pubic companies accountable personally for their actions, we won’t see any changes.

As always, let me know what you think.  Starting a conversation is always a good thing.

Josh Patrick

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Posted by stage2

Making public companies act in the best interest of their Shareholders

September 13, 2010

Last week I got into a conversation with a friend of mine about the large amount of money that public companies accumulate, but seem to often not distribute to their shareholders.  This conversation fits in with other public companies who pay huge bonuses to people who work in their organizations but don’t necessarily get outstanding results.  Finally, this all comes together with a huge brain drain we have in our country with our best and brightest going to work at places that don’t really add value to our society.  I hope to deal with each during this post.

The question for me is who is the real “owner” of the cash assets that public companies accumulate.  I’ve recently read that Apple Computer is sitting on fifty billion dollars in cash.  Research has shown that companies rarely add value through acquisition, but they often add a tremendous amount of value through organic growth.  The question for me is does Apple really need the fifty million dollars they’re sitting on or would that money have a better use as dividends paid to their shareholders?  My opinion is it would be better used by the shareholders as dividends.

The second question is about bonuses paid to employees of public companies.  In the case of the financial industry, traders are paid bonuses that are in line with what professional athletes and other entertainers earn who are the top of their game.  The difference between the traders and others who earn huge amounts of money is traders get paid well whether they perform or not.  Entertainers only get paid top dollar after they’ve proven they in the outlier range of those who practice their craft.  We’ve too often seen executives of companies who are more or less fired walk away with a pay package that often is close to ten million dollars.  To me, this is  an extremely poor use of corporate cash.

This leads to me to the real problem we face as a country.  When a huge amount of our economy is produced by industries that don’t add value, like the financial services industry, we start to lose our competitiveness around the world.  When our best and brightest want to have careers on Wall Street because they have a chance to reach for the brass ring without being ridiculously good we have a general societal problem.  We aren’t getting our best and brightest interested or taking careers in areas where manufacturing real products that add value and wealth to a society are being made.  We are seeing our best go to the fake world of derivatives where fantasy rules and stupid money is paid.

I can’t blame new graduates for going to where the money is.  I blame our society and political system for not having the guts to change our system and make intermediary industries less attractive, especially when we as a society hold the bag when things don’t work out.

Do you have any interest in seeing the focus change and if you do, what are your suggestions?

Josh Patrick

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Focus, it’s about one thing at a time

September 10, 2010

I’m a huge fan of bright shiny objects.  Bright shiny objects are anything that takes our attention away from the task at hand.   My problem is not finding enough things to do, my problem is focusing on the job at hand without getting sidetracked onto other projects where I try to multi-task.

In this area I don’t take my own advice very well.  I tell Clients on a regular basis that they need to limit what they work on and only concentrate on areas that can provide high returns for them.  And, when they are working on a particular area, close other windows on your computer and only concentrate on one task at a time.

This means no peaking at your in-box while in the middle of some work or looking up that favorite band with a new album while you’re in the middle of a phone call.  If we can manage to concentrate on the task at hand, we’re much more effective and efficient.  The amount of work that we get done goes up by a dramatic amount and we can schedule time for bright shiny objects.

For some, the idea of concentrating on one thing at a time feels punitive.  For others the reaction might be duh, what’s so earths shattering about that.  The point is that many entrepreneurs and private business owners often feel a time crunch for getting important projects done.  In fact, in many cases important never get started because owners spend so much time working on urgent activities in their business.

Tasks that aren’t reacting to a problem are the ones that we “should” spend a lot of time on.  We end up spending a great deal of time not on should, but on must or we’re in deep trouble.

I’m curious where you are on the spectrum and what your thoughts are.  The comments box is for starting conversations and for someone like me, that’s another wonderful opportunity to play with some new bright, shiny objects.

Josh Patrick

I’m asking Private Business Owners to take our survey.  Please click on this link for the survey.  We won’t be sharing your contact information with anyone else.  We also won’t contact you unless we have more questions.  We will share the results of our survey with you within two weeks of you filling it out.

Thanks in advance for your help.

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Posted by stage2

9 things you can do to have great service

September 8, 2010

The holy grail of a great business from a Customers point of view is how well the business provides services and products the Client wants.  I’ve compiled a list of things that make sense and should be part of your analysis of the service your company provides.

  1. Do you answer the phone with a real person?
  2. Are questions answered in a timely basis?
  3. How fast do you get back to a Client or prospective Client with an answer to their question?
  4. Do you tell the Client that your service is not right for them?
  5. If you tell the Client your service is not right for them, do you have suggestions for what they should do?
  6. Do you concentrate on educating your Client on why your service or product fills their needs?
  7. Do you let the Client stay in control of the sales and purchasing process?
  8. Do you ask the Client what is the best way to communicate with them?
  9. Are you and your company authentic in how you actually work with Clients and Customers?

It’s my belief that working towards following the obvious answers to questions above will help provide great service for your Customers.  It’s our responsibility to be proactive when working with our Clients.  It’s not their responsibility to follow through unless they’ve agreed to do so.  Hopefully our Clients will work towards becoming great Customers so we can concentrate on providing service and not tracking down people for broken agreements.

This is my small list of things companies do that provide great service.  What’s your list?

Josh Patrick

I’m asking Private Business Owners to take our survey.  Please click on this link for the survey.  We won’t be sharing your contact information with anyone else.  We also won’t contact you unless we have more questions.  We will share the results of our survey with you within two weeks of you filling it out.

Thanks in advance for your help.

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Mistakes really are the road to happines…….or at least learning

September 5, 2010

One of my favorite Elders is Buckminster Fuller.  Yes, I know that he’s been dead for quite a few years.  At the same time he left a huge legacy of writing and thoughts on how we should live in this world.

One of the statements I really like have been attributed to him, “you don’t learn less”.  I’ve lived my life with that credo, even before I heard the statement.

For me, not learning less means getting out there and doing it.  If you’re fortunate enough to do it correct the first time, push the envelope till you make some mistakes and then take stock and figure out what you learned.  If you start making mistakes immediately, take responsibility for those mistakes and figure out what you did wrong so you can start making adjustments.

In my opinion mistakes are not about the corrections as much as they are about taking responsibility for your actions, and learning to modify your behavior to get different results.  This modification should come from both actions involving people and actions involving systems.

Mistakes are also the food that one uses when creating experience.  Having done the same thing over and over is not experience.  It might give you a certain competence at doing a particular thing, but you’re not expanding your horizons and developing the ability to bring more value to you and those around you.  Trying new things is where the fun is.  It’s where you get a chance to experience new things and live from what those new things bring to your life.

Many times we’re afraid that what ever it is we do will be so “embarrassing” that we won’t be able to stand the humiliation that comes with trying something new.  In most cases the rest of the world doesn’t notice and you just get to shrug your shoulders and move on to try again with more refinement.

For me, making mistakes is just the way I live my life.  I find that very few mistakes can’t be corrected easily as long as I’m willing to take responsibility for my own actions.

What do you think.  Please leave a comment and let me know your thoughts.

Josh Patrick

Oh, if you’re an owner of a private business owner we’ve posted a good questionnaire that gathers information on why or why not you’re getting the success you want.  Click on the link and it’ll take you to our questionnaire.

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Posted by stage2

Moving from success to significance……a question many of us should answer

September 3, 2010

I often hear “experts” talking about separating your business from your personal life.  In some respects this makes sense, especially after you leave your business, but in others it never seems to work.

Private business owners often feel guilty when they don’t separate the two.  The problem with this is many private business owners, myself included think about their business more than eight hours a day.  It’s not something we put to bed when we walk out the door of our business.

In our connected world it’s easier for us to carry our work home with us.  Between laptop computers and distributed storage for our files it’s incredibly easy to continue working at home after the regular work day or on the weekend.  More than once I’ve meant to spend fifteen minutes on something and emerge four hours later having moved from project to project.

When we sell our business or move on to another stage in our life it’s then we have to make sure we have something to fill our time.  The phone stops ringing, people stop asking us for our advice and we become a non-person in the industry that we left.  For many, again including myself this can be or is an issue as much for our ego and feeling of self-worth as it is for how we spend our time.

If we’re not ready for the “exile” that happens when we leave our business the adjustment can be very difficult.  The what’s next question is an important one that needs to be answered.  If not, before you leave your business, then shortly afterwords as you’re trying to figure out how to spend your time.  There really is only so much golf that can be played.

There’s an organization called Halfetime that can help with many who have had successful careers, sold their business and are trying to figure out what’s next.  They help successful people move from the financial success they may have had to significance for how you spend your time.  The move to the second half of your life is one if done properly can provide a great deal of satisfaction.  I encourage you to give them a look and let me know what you think.

Josh Patrick

I encourage all comments to my blog.  I’m always interested in what readers are thinking about the topics I write about.

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Posted by stage2

Is small descrete steps better than taking giant ones?

August 29, 2010

I think I’ve finished the writing for our new web site.  Now I have to make sure that in fact, I have finished the writing, get the web designers to finish their final work and ship the product off to our compliance department and let them make their comments.  If all goes well I’ll be able to announce our new web site going live sometimes towards the end of September.

I realized this project has been going on for about four months and I’ve not written or talked much about it.  In fact, I’m just now sending out links to those I want to get comments back from about the new site and what their thoughts are.  The good news is that for the most part, the comments have been pretty good.  Although, one of my friends has let me know that it looks like a typical insurance or investment site with nothing interesting.

That comment started an interesting conversation.

My belief is that if we can help people narrow their focus and look at one or two ideas that interest them, there is a higher probability they will do something about it.  If instead, we have an adviser focused site where we talk about comprehensive planning instead of tactical planning, we’ll get people who might be interested, but are not likely to take action.

When a project or an idea has a finite level to it, people are likely to do something about the idea.  When there appears to be no end, it just feels like too much work.  The idea with our new website is to have each area have many finite roads someone can go down.  This does two things, it helps focus attention and it allows the participant to see where the end is.  My belief is that both are going to help us help our Clients take control of their situation, be the experts at what they want and as a result, their life might get better.  And, that is our goal……..helping our Clients make their life better.

Josh Patrick

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Posted by stage2

More thoughts on community

August 24, 2010

The wedding couldn’t have been better.  Alexa and Rob are now married and both are more than happy.

The community that was the wedding attendees and supporters has now moved on as this was a temporary community, or at least the entire group was a temporary community.  And, it was a very successful community.

So now I’m thinking about what makes a successful community versus a community that doesn’t work very well.  It seems to me that successful community leaders (in this case Rob and Alexa) think about what they want and how they want their community to look.  They also think about the people who they are inviting to the community and how they can all mix well together.

In the case of our wedding community there was a great deal of thought on the part of Rob and Alexa what they event would look like, who would be invited and who would be placed with whom.  They thought about food, flowers, decor and music.  They thought about what would make them happy and then invited people they thought would buy into their vision of a great wedding.

I think it might be the buy into the vision part of the weekend that made for a great event/community.  That’s also true for what some might call a real community.  Unless there is vision and buy-in, it’s hard to have a community that’s successful.  Just throwing people together in a hap hazard manner doesn’t make for great communities.  In fact, it often results in chaos, and dysfunctional communities.

That’s one of the problems with our Country.  We have so many competing ideas and thoughts for how communities should run and we have significant differences in the different geographic parts of our Country that forming a community that’s called the United States is very difficult.  The same is true in larger organizations.  Those with tens of thousands of employees have a hard time with community unless the company has thought about and worked very hard to get buy-in from the stakeholders around some organizing principle.

The more I think about community, the more I think that it’s up to the leaders to provide vision and then only let those who adopt that vision to join.  Otherwise, community is going to be difficult to achieve and we have to work towards peaceful co-existence.  Peaceful co-existence in many cases is fine, it’s just not community and won’t have the power of community.

That’s why the vision thing is so important.

Josh Patrick

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Posted by stage2

Communities, yes they still exist……they just morph more often today

August 22, 2010

Today is Alexa’s (my daughter) wedding day.  I’ve been thinking about the concept of community and how it fits in with getting married.

I’ve also been thinking a lot about both my mother who died over 26 years ago and Suzanne’s mother who recently passed on.  Both had a huge impact on the communities they were involved with and both left a large footprint on the world.

We all choose to participate in communities or pass on them.  We have so many communities to choose from today it often is difficult to decide which one to involve oneself with or which ones to pass on.  In addition, there are communities we may decide to participate in that are fleeting and only joined for a particular purpose or short time frame.

Today I’ll be participating in the community that has come together to celebrate Alexa and Rob on their wedding day.  For most of the people the community that I participate with will be a short time one.  For some, it’s a lifetime community and some, in between.  But, no matter what the time frame is the community will exist for today.

I’ve written and talked a lot about become a non-person after you sell a business or leave an industry for something else in your life.  This is a good example of joining a community and then moving on.  The problem for many is that they don’t realize they’ll be moving on as soon as they sell their business or leave an industry.

It’s not a bad thing that you’re moving on, and it’s not a bad thing when people don’t call as much as they used to.  It’s just that you’ve moved out of a particular community whether you wanted to or not.  For some, the surprise of being moved out of a community causes significant issues.  For some, they don’t realize their life will change.

I recommend that you think about the communities that you’re a member of and realize that as you move out of the circle of a particular community you think about joining a new one.  If you think about what you want in your new community the transition from one community to another can a fulfilling process.  We are all social and we all need community.  And, we all stand on the shoulders of those who have come before us and those who have moved on.

So, today I not only will be celebrating Alexa and Rob and their marriage I’ll be celebrating a unique community coming together to recognize their union.  I’ll also be remembering the community and footprint and both grandmothers had on both Suzanne and I and through us our daughter, Alexa.  It’s one of the bittersweet thoughts that I’ll dwell on today.

Josh Patrick

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Posted by stage2

Let’s think about a new way of organizaing our companies

August 20, 2010

I just finished reading Daniel Pink’s most recent book Drive.  This is one of those books that is good to read whether you agree with him or not.

His thesis is that we work better with more enthusiasm when are allowed to control how we do our work.  I think that thought makes sense.  Today we work more in a conceptual world than we do in a manufacturing or agrarian world.  In the conceptual world tight control over employees and partners is counter productive.  The more controls we put in place, the less creative our work becomes.

There is a move towards allowing people to spend up to twenty percent of their time working on any project they desire.  I like this idea.  It gives people working with us the chance to learn, spread their wings and take more responsibility for their work experience.

This idea is a tough one for first generation entrepreneurs who thing and want to control everything in their business.  Letting our employees and co-workers have more freedom about how they do their work can be a daunting experiment.  Many times we feel that if we don’t tightly control what’s going on, the wheels will come off our business.  Pink would say, that is actually the opposite.  The more tightly we control conceptual work, the more likely bad things will happen.

The research shows that what we do in managing most companies is the opposite of what we should do if we want high performing organizations.  And, in fact many of the companies I respect and enjoy doing business with the most have adopted strategies that allow employees to choose how, where and when they will do their work.

I strongly suggest that you take the time to read the book yourself.  If nothing else, it’ll cause you to think about your role as a manager or owner.

Josh Patrick

Leave a Comment » | Collaboration, Ethics, Family Business, For Business Advisors, For Business Owners, Uncategorized, Value Creation | Tagged: , , , | Permalink
Posted by stage2

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