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Where Women Fall Behind at Work: The First Step Into Management - WSJ
Oct. 15, 2019 | WSJ | By Vanessa Fuhrmans.

Long before bumping into any glass ceiling, many women run into obstacles trying to grasp the very first rung of the management ladder—and not because they are pausing their careers to raise children—a new, five-year landmark study shows. As a result, it’s early in many women’s careers, not later, when they fall dramatically behind men in promotions, blowing open a gender gap that then widens every step up the chain...... fix that broken bottom rung of the corporate ladder, and companies could reach near-parity all the way up to their top leadership roles within a generation.....“Bias still gets in the way—bias of who you know, who’s like you, or who performs and operates the same way you perform and operate, whose style is more similar.....Employers’ moves to diversify their most senior echelons could provide a road map.....“We’ve seen that if companies really put their minds to it, they can bring about change that matters,” Ms. Thomas says. “If they can apply the same extra elbow grease that they do at the top to the broken rung.........The numbers show that the first step is the steepest for women. But why is that? What’s holding women back from climbing that first rung into management?

It isn’t for lack of ambition..... while many employers have increased their efforts to groom and elevate more senior women—a smaller, select group—fewer have applied the same rigor to cultivating more junior female managers....The upshot: At nearly every career stage, the disparities between men and women have narrowed only marginally since the Women in the Workplace research began in 2015. Even in industries with largely female entry-level workforces, such as retail and health care, men come to dominate the management ranks—a phenomenon that Haig Nalbantian, a labor economist and co-leader of consulting firm Mercer LLC’s Workforce Sciences Institute, calls “the flip.......even in many “female-friendly” sectors, entry-level women still tend to get hired into jobs with limited upward mobility, such as bank tellers or customer-service staff. ..“When companies ask, ‘What’s the one thing we can do systemically?’ we say, ‘It’s not quotas, it’s not targets,’” says Mr. Nalbantian. “It’s about how do you position women and minorities to succeed in the roles that are likely to lead to higher-level positions.”......The takeaway for some women is that they have to assemble their own career ladder.....To secure a sponsor, “you’ve got to consistently perform, have a strong brand and deliver. That’s just table stakes,” she says. “But a lot of people do that and might still not move, because they don’t have the right support.”
barriers_to_entry  biases  coaching  diversity  entry-level  female-friendly  glass_ceilings  gender_gap  management  movingonup  obstacles  sponsorships  takeaways  talent_pipelines  up-and-comers  women  workforce  workplaces 
8 days ago by jerryking
Strategy or Culture: Which Is More Important?
“Culture eats strategy for breakfast.” These words, often attributed to Peter Drucker, are frequently quoted by people who see culture at the heart of all great companies. Those same folks like to cite the likes of Southwest Airlines, Nordstrom, and Zappos, whose leaders point to their companies’ cultures as the secret of their success.

The argument goes something like this: “Strategy is on paper whereas culture determines how things get done. Anyone can come up with a fancy strategy, but it’s much harder to build a winning culture. Moreover, a brilliant strategy without a great culture is ‘all hat and no cattle,’ while a company with a winning culture can succeed even if its strategy is mediocre. Plus, it’s much easier to change strategy than culture.” The argument’s inevitable conclusion is that strategy is mere ham and eggs for culture.

But this misses a big opportunity to enhance the power of both culture and strategy. As I see it, the two most fundamental strategy questions are:

1. For the company, what businesses should you be in?

2. And for each of those businesses, what value proposition should you go to market with?

A company’s specific cultural strengths must be central to answering that first question. For example, high-margin, premium-product companies that serve wealthy customers do not belong in businesses where penny-pinching is a source of great pride and celebrated behavior. Southwest has chosen not to enter a NetJets-like business, and that’s a sound decision.

Likewise, companies whose identity and worth are based on discovery and innovation do not belong in low-margin, price-competitive businesses. For example, pharmaceutical companies that traditionally compete by discovering novel, patentable drugs and therapies will struggle to add value to businesses competing in generics. The cultural requirements are just too different. This is why universal banks struggle to win in both commercial and investment banking. Whatever synergies they might enjoy (for instance, from common customers and complementary capital needs) are more than offset by the cultural chasm between these two businesses: the value commercial bankers put on containing risk and knowing the customer, versus the value investment bankers have for taking risk and selling innovative financial products.

Maintaining cultural coherence across a company’s portfolio should be an essential factor when determining a corporate strategy. No culture, however strong, can overcome poor choices when it comes to corporate strategy. For example, GE has one of the most productive cultures in the world, and its former leader, Jack Welch, concedes that his acquisition of Kidder Peabody was a failure because its cultural needs did not fit GE’s cultural strengths. The impact of culture on a company’s success is only as good as its strategy is sound.

No culture, however strong, can overcome poor choices when it comes to corporate strategy.

Culture also looms large in answering the second question above. In most businesses, customers consider more than concrete features and benefits when choosing between alternative providers; they also consider “the intangibles.” In fact, these often become the tiebreaker when tangible differences are difficult to discern. For example, most wealthy individuals choose financial advisors more for their personal chemistry or connections than their particular range of mutual funds. Virgin Airlines tries to attract passengers who like its offbeat, non-establishment attitude in how it operates. Culture experts are right to point out Southwest, Nordstrom, and Zappos because these companies have instilled norms of behavior that are essential features of their winning value propositions: from offering consistently low-price, high-quality service in Southwest’s case, to consistently delivering surprising staff service at Nordstrom and leading customer satisfaction at Zappos. What these companies really demonstrate is how culture is an essential variable—much like your product offering, pricing policy, and distribution channels—that should be considered when choosing strategies for your individual businesses. This is especially so when the behavior of your people, and particularly your frontline staff, can give you an edge with your customers.

Strategy must be rooted in the cultural strengths you have and the cultural needs of your businesses. If culture is hard to change, which it is, then strategy is too. Both take years to build; both take years to change. This is one of the many reasons that established companies struggle with big disruptions in their markets. For example, all the major credit card companies are seeking to transition from traditional payments to digital commerce. This shift in strategy will be difficult to pull off. It not only requires a cultural change, but also a change in companies’ target customer, value propositions, and essential capabilities—the three most fundamental choices a business strategy comprises!

Consigning strategy to just a morning meal for culture does injustice to both. Confining culture to the narrow role of “enabling” strategy prevents it from strengthening strategy by being part of it. It also weakens the power of strategy to turn your company’s cultural strengths into a source of enduring advantage.

Don’t let culture eat strategy for breakfast. Have them feed each other.
cultural_clash  cultural_change  intangibles  management  organizational_culture  Peter_Drucker  questions  quotes  strategy  synergies  value_propositions  via:enochko  unscalability 
march 2019 by jerryking
The Quarterback of the Kitchen? It’s Not Always the Chef - The New York Times
By Tejal Rao

April 17, 2018

You’re most likely to notice it in the abstract, if you notice it at all. The work of a good expediter is in the pacing of your dinner. It’s in the steadiness of the room. It’s in the sense that everyone in the restaurant is moving to a single, unbreakable rhythm.
cooking  management  restaurants  expediting  data_driven  commercial_kitchens 
may 2018 by jerryking
If I was...setting out to be an entrepreneur - FT.com
January 15, 2014 | FT | By Daniel Isenberg.

“Worthless Impossible and Stupid: How Contrarian Entrepreneurs Create and Capture Extraordinary Value”.

...If I were setting out as an entrepreneur today, I would buy an existing company to scale up rather than build a start-up from scratch. I would make incremental tweaks of improvement rather than innovate, exercise cool judgment rather than hot passion and build my departure plan from day one...a lot of great businesses, such as PayPal [the online payments system] and Kaspersky [the internet security company] are carved out of, or combined from, existing assets, or are family businesses taken sky-high by the second or third generation...Rather than start a new company, I would buy a rusty old business to fix up and grow as fast as I could. I want a discarded company that is undervalued but can be dusted off, refurbished with vision and talent, and scaled up. I would be talking to venture capitalists....I know that proprietary technology is not a market maker by itself. Great marketing and management almost always trump big innovation.

Minnovation – small tweaks on existing products – is what moves the ball of economic growth forward. Neither Facebook nor Google, for example, were technology pioneers.

Big innovations are few and far between and are often the stuff of large companies with long patience and deep pockets....Next, I would drain my venture of passion and replace it with commitment, hard work and realistic and relentless self-assessment....start with a stark test of harsh neon lights, exposing every flaw and crack long before the market does so that I can fix them before the customers vote with their feet....plan one's passionless departure from the start, creating a platform to allow the talented people and partners I hire to outperform me very soon.
entrepreneur  entrepreneurship  rules_of_the_game  unglamorous  books  Daniel_Isenberg  advice  howto  passions  exits  lessons_learned  turnarounds  contrarians  scaling  minnovation  undervalued  under-performing  carveouts  family_business  proprietary  incrementalism  self-assessment  customer_risk  breakthroughs  large_companies  vision  refurbished  spin-offs  hard_work  dispassion  marketing  management  commitments  marginal_improvements  unsentimental  outperformance 
january 2014 by jerryking
Academic marriage that works - Western Alumni
Fall 2013 | Alumni Gazette |by Paul Wells, BA'89.
"Many were engineering students. Their schedules were loaded up with lecture and lab hours, they seemed to live at the library, and yet somehow they were often also the most reckless and entertaining at The Spoke. Even more exotic to me were the business students. It had never occurred to me that making money was something you could study at school.

What had also never occurred to me,until recently, was that you could combine these two odd breeds of student. Engineers spend their lives solving technical problems. Business students spend their lives finding opportunities for profit. What if somebody knew how to do both? What if there was a school designed to hone both kinds of skill?"...So lately, people in the field have started to ask whether the problem is at the other end. Maybe researchers are coming up with plenty of good ideas, but businesses are not in the habit of looking around for new ideas and integrating them into the corporate culture. “Quite frankly, if there is an innovation problem in Canada, that’s the responsibility of the management and boards of directors here in Canada,” John Manley, the former Industry Minister, who is CEO of the Canadian Council of Chief Executives, has said....Western announced it had received $3 million from alumni John M. and Melinda Thompson to set up a Centre for Engineering Leadership and Innovation at Ivey Business School. The gift will substantially increase the number of Western engineering students who receive business education while at Western.
engineering  Ivey  UWO  Paul_Wells  alumni  John_Manley  philanthropy  cross-disciplinary  innovation  boards_&_directors_&_governance  management 
october 2013 by jerryking
Why Your Startup Can’t Find Developers ⚙ Co.Labs ⚙ code + community
2013-09-26

Co.Labs
Why Your Startup Can’t Find Developers

Matt Mickiewicz runs a developer recruitment site called Hired. He sees startups making these same mistakes over and over.
By: Ciara Byrne
hiring  recruiting  management  start_ups  software_development 
september 2013 by jerryking
Clayton Christensen Wants to Transform Capitalism | Wired Business | Wired.com
By Jeff Howe
02.12.13

Howe: You’re working on a new book now, right? The Capitalist’s Dilemma. How is that related to the Innovator’s Dilemma?

Christensen: I wrote a piece for The New York Times just before the election. I was wrestling with a paradox. If you look at the financial measures of prosperity in the economy, things seem to be going just great, especially company balance sheets. They haven’t been so strong in decades.

Howe: High market caps all around.

Christensen: It looks like the economy is emerging from the recession in an exciting way, but we’re not creating more jobs or income for the average person. And in all humility, I think I articulated a simple model that explains why. The bad actors are business school professors like me who have been teaching people what I call the Doctrine of New Finance. We’ve encouraged managers to measure profitability based on a return on net assets, or return on capital employed. That encourages companies to liberate their capital, so they invest in efficiency innovations, which means they can make more money with fewer resources. But what the economy ultimately needs are empowering innovations—like the Model T, the transistor radio. Empowering innovations require long-term investments, which tie up capital for years and years. So companies are using capital to create more capital, and consequently the world is awash in capital but the innovations we need to advance aren’t there.

Howe: What’s the solution?

Christensen: I don’t know the solution, but I believe solutions exist. The government can’t dictate, “Oh, that’s an empowering innovation and that’s not.” But what government can do is create tax rates that transform what I call migratory capital into productive capital. Migratory capital flows to investments that will maximize the speed with which it can then be withdrawn, which plays to the doctrine of new finance. Productive capital wants to stay on the job and not go truant after 366 days.

Howe: Can we structure a tax code that encourages that?

Christensen: Absolutely. The idea would be to peg a tax rate to the length of time the capital is deployed. The longer the capital is invested, the lower rate it’s taxed at, until it gradually approaches zero and maybe goes negative
disruption  Clayton_Christensen  capitalism  innovation  books  ROCE  management  capital_flows  sweating_the_assets  moonshots  breakthroughs  tax_codes 
february 2013 by jerryking
Big Changes Drive Small Carpet Firm - WSJ.com
October 30, 2006 | WSJ | By PHRED DVORAK
Theory & Practice
Big Changes Drive Small Carpet Firm
Hong Kong's Tai Ping Sets Global Growth on Overhaul In Management, Marketing

The small Hong Kong carpet maker hired an American chief executive who had never been to Asia and installed him in New York. It revamped its executive team, centralized marketing and acquired a high-end carpet maker in the U.S...."We're trying to create a minimultinational," says director John Ying, who helped push Tai Ping in its new direction.... small companies can -- and sometimes must -- globalize as much as big ones....
globalization  CEOs  Hong_Kong  small_business  howto  carpets  multinationals  microproducers  tips  marketing  strategy  management  turnarounds  metrics  managing_change 
february 2013 by jerryking
The Messy Business of Management
By Ian I. Mitroff, Can M. Alpaslan and Richard O. Mason

September 18, 2012| |

“Managers don’t solve simple, isolated problems; they manage messes.” Ackoff was also instrumental in defining the nature of such messes. According to him, a mess is a system of constantly changing, highly interconnected problems, none of which is independent of the other problems that constitute the entire mess. As a result, no problem that is part of a mess can be defined and solved independently of the other problems. Accordingly, the ability to manage messes requires the ability to think and to manage systemically; this in turn requires that one understand systems thinking. addressing complex, messy problems also requires constructive conflict and structured debate with others to help test one’s assumptions — and help ensure that one is not solving the wrong problem. Many business schools excel at teaching young managers well-structured models, theories and frameworks. But we believe that business schools should spend more time helping their students surface, debate and test the assumptions underlying each model, theory or framework they are learning about. In this way, by developing students’ critical thinking skills, universities would prepare young business leaders to succeed in a messy, uncertain world.
critical_thinking  crisis  business_schools  constant_change  uncertainty  management  systems_thinking  complexity  networks  interconnections  problem_solving  messiness  assumptions 
january 2013 by jerryking
The Management Myth
June 2006 | ATLANTIC MAGAZINE |By Matthew Stewart

Most of management theory is inane, writes our correspondent, the founder of a consulting firm. If you want to succeed in business, don’t get an M.B.A. Study philosophy instead
skepticism  management  curriculum  business_schools  MBAs  philosophy  philosophers  myths 
june 2012 by jerryking
The Real Job Creators: Why America should glorify entrepreneurs less and managers more. - Slate Magazine
By Esther Dyson|Posted Friday, Nov. 18, 2011,

a man who arrives in a village with what he claims is a magic stone. Put the stone into a pot of water over a fire, he says, add a just few ingredients—some vegetables, some old ham bones, a few spices—and soon you will have a delicious, life-giving soup with magical healing properties.

In this folk tale, the man is a trickster: The point of the story is that his magic stone is just a plain old rock. To modern eyes, however, this man is an entrepreneur. His “magic stone” is perhaps the germ of an idea, a product concept, or a marketing innovation. The entrepreneur takes the stone and adds ingredients (commodities or software), attracts people, gets them to work together, and perhaps tosses in a pinch of branding. The result is value where before there were only unexploited resources.

But that is only the beginning of the story. In the long run, the entrepreneur’s job is not to make soup, but to create a restaurant—or, better yet, a chain of restaurants—so that the magic soup can be made reliably, day after day, by a team that can work on its own without the impresario’s direction. Over time, the company will continue to evolve, improving the soup, adding other items to the menu and opening up restaurants in new markets....We can argue about the value of education, but large companies are good at offering practical business skills—turning college graduates into project managers, marketers, human-resources specialists, and the like. These jobs may not generate revenues directly, but they are part of the structure that enables people to run companies effectively and benefit from economies of scale.
college-educated  economies_of_scale  entrepreneur  entrepreneurship  e-Myth  Esther_Dyson  impresarios  job_creation  large_companies  management  storytelling  unexploited_resources  value_creation 
november 2011 by jerryking
How high is your return on management?
January-February 1998 | HBR |Simons, Robert, and Antonio Davila.ROM
ROM measures the payback from the investment of a company's scarcest resource-managers' time and attention.
HBR  ROI  management  metrics  time-management  measurements 
october 2011 by jerryking
Sticking together
Nov 11th 2010 | The Economist | Schumpeter: Advice on managing partnerships, courtesy of Keith Richards and Michael Eisner
entrepreneurship  autobiographies  management  partnerships  rollingstones  Michael_Eisner  Keith_Richards 
november 2010 by jerryking
Driving ideas to success with plan for profit
March 31, 2008 | Western News | By Paul Wells, BA'89.
Research works best when its only spur is the curiosity and energy of
thoughtful investigators with the tools to follow hunches. But the
product of their work - ideas - is likeliest to leave the lab when it is
pulled out by entrepreneurs who have an eye on the market. It's
important to get that balance right. It's pointless to fund only
research that looks likely to pay off. You can't know which ideas will
pay off. But new ideas won't go anywhere without competent managers to
implement them. Roger Martin at the University of Toronto's Rotman
School of Management has persuasively demonstrated that if Canada has
fewer high-tech industries than the United States, it's not because
we're doing less science, it's because we have a smaller
university-trained management class. Western's Ivey School of Business
is a big part of the solution, not part of the problem.
UWO  Ivey  Rotman  Roger_Martin  Paul_Wells  curiosity  commodities  natural_resources  research  R&D  entrepreneurship  commercialization  management 
may 2010 by jerryking
Marketing Myopia
July-August 2004 (Reprint from 1960) | Harvard Business Review | by Theodore Levitt.

Marketing Myopia suggests that businesses will do better in the end if they concentrate on meeting customers’ needs rather than on selling products......

Fundamental idea
The Myopic cultures, Levitt postulated, would pave the way for a business to fall, due to the short-sighted mindset and illusion that a firm is in a so-called 'growth industry'. This belief leads to complacency and a loss of sight of what customers want. It is said that these people focus more on the original product and refuse to adapt directly to the needs and wants of the consumer.

To continue growing, companies must ascertain and act on their customers’ needs and desires, not bank on the presumptive longevity of their products. In every case the reason growth is threatened, slowed or stopped is not because the market is saturated. It is because there has been a failure of management.

Some commentators have suggested that its publication marked the beginning of the modern marketing movement.[2] Its theme is that the vision of most organizations is too constricted by a narrow understanding of what business they are in. .....Organizations found that they had been missing opportunities which were plain to see once they adopted the wider view. ....There is no such a thing as a growth industry. There are only companies organized and operated to create and capitalize on growth opportunities.......There is a greater scope of opportunities as the industry changes. It trains managers to look beyond their current business activities and think "outside the box". . If a buggy whip manufacturer in 1910 defined its business as the "transportation starter business," they might have been able to make the creative leap necessary to move into the automobile business when technological change demanded it.....People who focus on marketing strategy, various predictive techniques, and the customer's lifetime value can rise above myopia to a certain extent.
HBR  marketing  management  filetype:pdf  media:document  Theodore_Levitt  myopic  out-of-the-box  short-sightedness 
february 2010 by jerryking
What Do Managers Do? As Work Changes, So Must Managers - WSJ.com
JANUARY 22, 2010 | Wall Street Journal | by Alan Murray. In an
excerpt from the WSJ Essential Guide to Management, Alan Murray
explains what a good manager does and how the job has changed. In his
1989 book, author Warren Bennis listed differences between managers and
leaders. Among them:

* The manager administers; the leader innovates.
* The manager focuses on systems and structure; the leader focuses
on people.
* The manager relies on control; the leader inspires trust.
* The manager has a short-range view; the leader has a long-range
perspective.
* The manager asks how and when; the leader asks what and why.
* The manager imitates; the leader originates.
* The manager accepts the status quo; the leader challenges it.
* The manager does things right; the leader does the right thing.
management  managers  leaders  Warren_Bennis  long-range 
january 2010 by jerryking
Special Report: Every cloud has a satin lining - Luxury goods;
Mar 23, 2002 | The Economist Vol. 362, Iss. 8265; pg. 84. "If
there is one critical word in the luxury business, it is 'execution'.
People think about the luxury business in the wrong way--they think
about brands. But luxury companies are primarily retailers. In
retailing, the most important thing is execution, and execution is all
about management. You may have the best designed product, but if you
don't get it into the right kind of shop at the right time, you will
fail."
luxury  branding  management 
december 2009 by jerryking
Too many scientists, not enough managers
May. 23, 2007 | The Globe and Mail | by Gordon Pitts. A
study, produced by Ontario's Institute for Competitiveness &
Prosperity and co-written by University of Toronto management dean Roger
Martin, says Canada is placing undue emphasis on science and technology
talent, while neglecting management skills that are in short supply.
"Our managers are undereducated relative to their U.S. counterparts,"
concludes the report, co-written by the institute's executive director
Jim Milway. "We produce fewer graduates in the management discipline
while no such deficit exists in science and engineering."

While science and engineering are important in seeding new ideas and
startups, leadership and management skills, such as strategic thinking,
come into play as companies try to move to the next level as users and
developers of innovation, the report argues.
Gordon_Pitts  Roger_Martin  productivity  Canadian  prosperity  competitiveness_of_nations  management 
november 2009 by jerryking
Cisco CEO John Chambers Projects Strong Growth - WSJ.com
JULY 24, 2009 | Wall Street Journal | Interview of John Chambers by Michael S. Malone
Cisco  leadership  CEOs  management 
july 2009 by jerryking
Hal Varian on how the Web challenges managers
January 2009 | The McKinsey Quarterly | interview with Hal
Varian . We have to look at today’s economy and say, “What is it that’s
really scarce in the Internet economy?” And the answer is attention.
[Psychologist] Herb Simon recognized this many years ago. He said, “A
wealth of information creates a poverty of attention.” So being able to
capture someone’s attention at the right time is a very valuable asset.
And Google really has built an entire business around this, because
we’re capturing your attention when you’re doing a search for something
you’re interested in. That’s the ideal time to show you an advertisement
for a product that may be related or complimentary to what your search
is all about.
management  strategy  innovation  McKinsey  psychologists  attention_spans  Information_Rules  Google  Hal_Varian  digital_economy  scarcity  attention  intentionality  information_overload 
july 2009 by jerryking
The Risk Revolution | The Tools: The New Arsenal of Risk Management - HBR.org
September 2008 | Harvard Business Review | by Kevin Buehler, Andrew Freeman, and Ron Hulme
HBR  management  risks  risk-management 
may 2009 by jerryking
How to be wise before the event
March 9 2009 | Financial Times | By Stefan Stern.

Restraint is back in fashion in these recessionary times. People have lost their appetite for risk.

But hang on a minute. No risk will mean no reward. You need new markets and customers to grow, and that means taking steps into the unknown. I doubt that anyone will be suggesting, in this newspaper’s new series of articles on the future of capitalism, that risk-taking should be abolished.

Bad risk-management helped get us into the current mess. It is vital that we learn the right lessons about risk from the crisis. What are they?

The new edition of Harvard Business Review contains a lucid piece of analysis from René Stulz, professor of banking and monetary economics at Ohio State University’s Fisher College of Business. While his principal focus is on the financial sector, the diagnosis will be helpful to managers in any business or organisation.

Prof Stulz describes six ways in which risk has been mismanaged. First, there has been too much reliance on historical data among today’s decision-makers. Extrapolating from the past can provide, at best, only partial guidance for the future. Financial innovation has created a new world. No wonder some managers were unprepared for the calamitous fall in asset prices and demand. This collapse was unimaginable to anyone basing their thinking on post-war performance alone.

Second, narrow daily measures – in banking these are known as “value at risk” measures – have underestimated the risks that are being run. The assumption behind a daily measure of risk is that action can be taken quickly (through an asset sale) to remove that risk. But, as the current crisis has shown, such rapid moves become impossible when markets seize up.

Third, knowable risks have been overlooked. Managers who work in silos may appreciate the risks that they personally are exposed to. But they may not see how risks being run elsewhere in the business could affect them too. Someone – a chief risk officer? – needs to track them all.

Fourth, concealed risks have been overlooked. Incentives have proved to be particularly dangerous in this regard. Some traders and lenders may have enjoyed taking risky decisions that in the short term appeared to be delivering well for them and their organisations. But they had no incentive to report any downside risk. And unreported risks tend to expand.

Fifth, there has been a failure to communicate effectively. It is dangerous, Prof Stulz says, when risk managers are so expert in their field that they lose the ability to explain in simple terms what they are doing. The board may develop a false sense of security by failing to appreciate the complexity of the risks being managed.

Last, risks have not been managed in real time. Organisations have to be able to monitor fast-changing markets and where necessary respond to them without delay.

Prof Stulz offers a useful technical analysis. But a true understanding of risk also requires a maturity of outlook, an ability to see the big picture, and deep experience. This last is a rare commodity: impossible to fake and acquired only over time.

In a new McKinsey publication called What Matters, the 90-year-old investment manager and author Peter Bernstein offers some sober insights. “What is risk management all about anyway?” he writes. “We use the words as though everybody understands what we are talking about. But life is not that simple. Risk means more things can happen than will happen – which is a fancy way of saying we do not know what is going to happen.”

Mr Bernstein’s central point – not revolutionary, but unarguable – is that downside risks must be assessed rigorously. Someone old enough to remember the Wall Street crash is probably worth listening to right now.[JCK: elder wisdom]

“Nothing is 100 per cent sure,” Mr Bernstein says. “While a 95 per cent probability is statistically significant, that still leaves us in the dark about the remaining 5 per cent; we may decide to accept that uncertainty and bet on the 95 per cent sure thing, but there is still a possibility of being wrong.

“The crucial question to ask is, ‘What would be the consequence if that 5 per cent chance comes to pass?’ ”

Welcome to the less exciting but more soundly based era of calculated risks. For the foreseeable future, business leaders will be trying to be wise before rather than after the event.
beforemath  business  communicating_risks  downside_risks  elder_wisdom  false_sense_of_security  fast-changing  hidden  management  McKinsey  overreliance  Peter_Bernstein  recessions  real-time  risks  risk-assessment  risk-management  Stefan_Stern  the_big_picture  VaR  what_really_matters  wisdom 
may 2009 by jerryking
Hired guns: the 'new rock stars'
Oct 18, 2006 | The Globe and Mail. Toronto, Ont. | article appeared on . pg. C.3 and was written Wallace Immen.
management  Wallace_Immen  interim 
march 2009 by jerryking
Watershed Interim Management
Taken from a Financial Time newspaper
management  interim 
march 2009 by jerryking
The Manager as Double Agent - WSJ.com
June 3, 2008 WSJ article by Matthew Gurewitsch which looks at a
record labels' launch of a talent management agency representing
recording artists some of whom were not the label's clients.
branding  music_labels  talent  product_launches  management  artists  music_industry  talent_management  talent_representation 
january 2009 by jerryking

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