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jerryking : stagnation   5

The Economy Needs Amazons, but It Mostly Has GEs
the country as a whole badly needs some rules-defying risk-taking. For business, that means a bit more Amazon in the boardroom and a bit less GE....The purchase of Whole Foods by Amazon introduced a level of volatility and turmoil (at least singularly to the retail sector) which had been absent from the market for a long time....The rest of the market remained placid. And months of historically low volatility has begun to look like dangerous complacency....... another, potentially more troubling explanation: stagnation. Muted markets may be an inevitable product of steady, sluggish growth, low and predictable interest rates, declining business startups and failures, and decreased competition. In other words, the problem is, there aren’t enough Amazons disrupting the stock market and the economy.....Jeffrey Bezos founded Amazon in 1994, he has prioritized expansion and innovation ahead of profit. In its early years, free cash flow—cash from operations minus CAPEX—hovered around zero. Mr. Bezos approaches new products like a VC. Many will flop (like the Fire smartphone), but some will be home runs (e.g. AWS). Amazon launched Prime, which offers free delivery in exchange for an annual fee, in 2005. John Blackledge, notes Amazon has repeatedly innovated in ways that make Prime even more valuable to subscribers.......Amazon is now profitable, yet cash retention remains secondary to building great products and delighting and retaining customers.

....If Amazon is one extreme in how companies invest, General ElectricCo. is the other. It has long been fastidious about capital and cash deployment......CEO Jack Welch perfected this approach in the 1990s.. it continued under Jeffrey Immelt. Last week, Mr. Immelt said he would retire, after 16 years struggling to restore growth. In part, that reflected how financial engineering had inflated profits under Mr. Welch. Yet Mr. Immelt ’s investment decisions too often chased the conventional wisdom on Wall Street and in Washington. ...........growth is hard for any company that dominates its markets as much as GE does. GE’s size also attracts debilitating political scrutiny. ....In response to new regulations and pressure from Wall Street, Mr. Immelt largely dismantled the business...........Investors still want GE to return cash to shareholders, and it has obliged,.....while good for shareholders in the short run, this is no recipe for growth in the long run. GE’s cash flow is shrinking despite the company’s focus on preserving it, while Amazon’s is growing despite that company’s readiness to spend it.......North American boardrooms desparately needs some rules-defying risk-taking. For business, that means a bit more Amazon in the boardroom and a bit less GE

[ See John Authers article which references Vix]

The "Minsky Moment" occurs when investors realize that they have paid far too much for the credits that have bought, no buyers can be found, and the system collapses. Aka Wile E. Coyote running-off-a-cliff....The greatest dangers to us are not from things we perceive to be high-risk, because we generally treat them carefully. Trouble arises from that which we perceive to be low-risk.
digital_economy  Amazon  GE  Amazon_Prime  risk-taking  volatility  Greg_Ip  stagnation  cash_flows  long-term  growth  start_ups  complacency  instability  conventional_wisdom  Jeffrey_Immelt  Jack_Welch  conglomerates  delighting_customers  capital_allocation  Jeff_Bezos  financial_engineering  rule_breaking 
june 2017 by jerryking
Saving Your Career When Your Position Has Been Outsourced
Dec. 12, 1995 | WSJ | HAL LANCASTER.

here are some rules for keeping your career moving after outsourcing:

When the announcement is made:

If you're surprised, you have already been left at the starting gate.

Messrs. Travis and Molter had an excuse, outsourcing was rare then. Anybody who claims surprise today isn't paying attention.

KNOW YOUR company's financial condition, how much cost-cutting it's doing and which operations qualify for the chopping block. If your department looks ripe for outsourcing you should already be looking for a less vulnerable position.

If not, contact key executives to assess opportunities for staying put.

You'll hear a lot of hooey about ``core competencies'' and ``aligning with corporate goals.'' Translation: Find a job the company can't afford to cut, or start looking elsewhere.

Prepare to wow the new folks.

You know the drill: research the company, its strategy, how you can contribute, etc. Dust off any ideas you have about how to do your job more efficiently.

After the move:

Quickly survey the landscape.

Who are the power brokers? Who are potential mentors? Andersen assigns a coach to help the outsourced, Mr. Wray says.

Be active.

Take advantage of any get-together, social or professional, to get acquainted with important new colleagues in your department and elsewhere, Mr. Molter says. ``If you're not aggressive,'' Mr. Wray counsels, ``you can feel like an outsider.''

Look for opportunities to learn new things.

Mr. Molter started taking management and technical classes. ``Don't stagnate on the job,'' he says. Make sure you're continually trying to improve yourself and making yourself available for future positions.''
Outsourcing  tips  Hal_Lancaster  survival  survival_techniques  stagnation  Managing_Your_Career  power_brokers  pay_attention 
december 2012 by jerryking
Look to Giants, Not Start-Ups, for Innovation
From the Wall Street Journal
Informed Reader
November 20, 2007; Page B8

When people think of radical innovations, they usually think of start-ups that shake an industry from the ground up. Some sectors are hobbled with "intractable, industry-wide problems" that only a large company can solve, says Mr. Grove, the co-founder of Intel. Mr. Grove, who has been researching the phenomenon with Stanford Graduate School of Business professor Robert Burgelman, calls this "cross-boundary disruption." Crucially, the industry on the other side of the boundary is "stagnant and populated with companies that cling to doing business the way they always have."
Andy_Grove  Apple  brands  breakthroughs  cross-boundary  disruption  industry_boundaries  innovation  large_companies  moonshots  Fortune_500  GE  stagnation  start_ups  Wal-Mart 
june 2012 by jerryking

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