Monthly Archives: April 2012

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CHIP BELL’S Book WIRED AND DANGEROUS

April 30, 2012 in Chip Bell

WIRES AND DANGEROUS BY CHIP BELL, A bronze medal winner of the 2012 Axiom Business Book Awards.

Customers today are picky, fickle, vocal, and “all about me” vain. With the reach and influence of the Internet, they are also powerful. If they receive poor or impersonal service, they talk back—with a single snarky video or damning review gone viral, they can bring down a company. To succeed in this new world, it is vital that customers are treated not as cash machines but as collaborators. Chip Bell and John Patterson analyze this service revolution and provide a tested formula for transforming today’s edgy customers into eager partners. Using real-world examples, they detail compelling methods and pragmatic tools for bringing harmony and balance to a relationship that was out of whack even before the Internet.

click here to learn more about Chip Bell Speaker and Author

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Vikram Mansharamani- Gold: A Boombustology Perspective

April 30, 2012 in Guest Bloggers

CLICK HERE TO LEARN MORE ABOUT VIKRAM MANSHARAMANI

As gold has been one of the most volatile assets in the past several weeks, with some analysts arguing for a $10,000/ounce fair value, many in the media and investment communities have asked me if gold is a bubble.  To answer this very difficult question, I have chosen to apply the five-lens framework from my book Boombustology to gold today.

Let’s begin with my first lens, micro-economics.  Most mainstream economic theories utilize a supply and demand driven price determination model that generally results in prices tendingtowards equilibrium.    I say “tending” because most serious scholars admit that behavioral and informational issues can distort the price at any one point in time, but there exists an overarching philosophical belief that such distortions are rapidly ironed out.  Markets are, according to this view, efficient.  Higher prices dampen demand, and lower prices dis-incentivize supply.

Let us suppose for a minute, however, that higher prices increase demand.  Such a dynamic might arise for many reasons, but one eloquent explanation for such an outcome in asset markets is the Theory of Reflexivity, as proposed by George Soros.  Although the theory has many subtleties beyond the simplified “self-fulfilling” logic that many ascribe to it, the underlying implication of this perspective is that prices can and do tend away from equilibrium.  In this case, boom and bust dynamics appear highly likely.

Turning to gold, it appears higher prices are indeed generating more demand.  Might his indicate that a reflexive dynamic is underway?  Are prices tending towards or away from an equilibrium level?  Evidence from the Gold ETF (GLD) indicates that higher prices have correlated with higher demand for gold. The chart below shows the number of shares outstanding (i.e. a reasonable proxy for “demand”) and the price per share of GLD.  The fact that these two metrics correlate indicates that both price and demand are aligning, a classic sign of bubbly conditions.  Lens 1: check.

GOLD ETF PRICE AND GOLD ETF SHARES OUTSTANDING

FIGURE: Gold ETF price per share vs. Gold ETF shares outstanding

My second lens is macroeconomics, with special attention to credit.  In Chapter 11 of my book, I state that financial innovation that embeds or enables leverage can often provide fuel to a bubble.  Indeed, rapidly rising leverage of any sort (direct or indirect) is cause for concern.

Consider the above-mentioned GLD, the gold ETF that enables individuals to purchase Gold directly in a brokerage account. Unfortunately, however, because I do not have access to aggregated brokerage account information, it’s hard to determine if GLD has been purchased on margin or financed with equity.  Combine this with the double, triple and other leveraged ETFs that promise multiples of daily price moves.  For good measure, add on a bit of small margin, high effective-leverage futures…and what you get is evidence of a credit fueled asset price dynamic.  Consider the fact that I can today (as an individual) buy 100 ounces of gold exposure (>$150,000 at the time of this writing) through futures market by putting down less than $10,000.  This enables me to have more than 15x financial leverage!  Clearly, embedded and indirect leverage are clearly supporting the gold market.  Lens 2: check.

Overconfidence and new era thinking are the hallmarks of my third lens, psychology.  Whenever individuals develop a devout belief that “its different this time,” buyers beware.  It is rarely different and asset prices generally go up and down and in this regard, gold prices too go both up and down.

So, is there a belief that gold is a “store of value” like no other?  Absolutely.  Is it deemed a commodity that is different than others?  Perhaps it is considered protection against inflation…but others insist it is the only thing to own when facing deflation.  The reality is that gold is a risk-asset like any other.  Its price rises and falls.  In fact, the fall is generally more frequent followed by an occasional but spectacular rise.  For a concise analysis of historical gold price dynamics, read Ken Fisher’s Debunkery Bunk 35: “With Gold You’re Golden” which ends with an eloquent recommendation: “Feel free to buy gold – for earrings, necklaces, and electrical wires.  But for your portfolio, gold has less luster unless you’re a super-duper timer.”   Lens 3: Check.

The fourth lens of my bubble-spotting framework is politics.  I tend to focus on government intervention and the distortions such actions have on market prices. This a complicated topic when it comes to gold, and one I will revisit after addressing my fifth lens.

An application of epidemic thinking to the study of financial bubbles has proven very useful in gauging the relative maturity of manias.  Let us analogize an investment hysteria to a fever or flu spreading through a population. To an epidemiologist, the variables of concern include the infection rate, the removal rate, and perhaps most importantly, the percentage of the population not (yet) affected.  The population of “yet to be infected” participants can be thought of as fuel that is available to keep the fire burning.  Once we run out of fuel, the party’s over.  Prices will fall.  The investing implications of this logic can be illustrated with a simple piece of advice: Don’t buy whatever your taxicab driver is talking about.  It’s too late.  Widespread amateur investor participation is tell-tale sign that a bubble is in its last innings.

One way to gauge amateur participation in a financial bubble is observe media targeting everyday audiences.  In this regard, gold is very concerning.  While walking through the streets of NYC one recent afternoon, I saw no fewer than 14 signs offering to buy my gold, 18 signs indicated there was a willingness to sell me gold…and if I veered several blocks in the wrong direction, I’m sure there are eager individuals that would simply take my gold.  Other confirmatory indicators include TV commercials, billboards, dinner party conversations, and the fact that everyone under the sun now has an opinion about gold.  Gold is, in many ways, the ultimate greater fool asset.  To make money investing in gold, you need someone with a belief more money is to be made to take it off your hands.  Lens 5: Check.

Before concluding that gold is bubble (which I tend to believe is more likely than not), let’s revisit lens #4.  While I generally do not subscribe to the many conspiracy theories arguing that governments are manipulating gold markets, the primary linkage with politics over long periods of time has been through the currency.  Thus, we can ask if today’s policies are affecting currencies in a way that might be affecting gold.  Given that gold is effectively an “anti-asset,” by which I mean it is the flip-side of fiat currencies, we need to evaluate what is happening in the market for fiat currencies…and in this regard, the upside pressure on gold remains.  In many senses, I am therefore agreeing with Jim Grant’s point that gold’s price is an inverse indicator of investor confidence in central banks.  Lens 4: half-check.

Thus, given that four and a half of my five indicators are flashing “bubble,” it is my view that gold is very bubbly.  But as many bubble-watchers know all too well, the final innings of a bubble can be extremely profitable.  Combine this potentially lucrative opportunity with a bit of career risk (from not-participating) and you get a very volatile situation. The gold game is not in the first innings, and in fact may be well beyond the seventh-inning stretch.  When one considers the fat that gold does not generate any cash flow, costs money to protect, and is generally not consumed (i.e. 99%+ of the gold taken out of the ground in the history of the world is still around today), one must use extreme caution when dabbling in this market today.

Miss the last gains, but avoid potentially devastating losses? Or capture potentially very dramatic gains rapidly, with a known and elevated risk of big losses?  Given investors are all prone to making errors, it may be more prudent at this juncture to make the error of omission (miss gains, avoid losses) than to make the error of commission (ride gains, capture losses).

Vikram Mansharamani, a Lecturer at Yale University, is the author of Boombustology: Spotting Financial Bubble Before They Burst, published by John Wiley & Sons. The book presents a multi-disciplinary method for identifying unsustainable booms in financial markets.

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Geoff Colvin – Southern Co.‘s Tom Fanning bets big on nukes

April 27, 2012 in geoff colvin

CLICK HERE TO LEARN MORE ABOUT GEOFF COLVIN

Interview with Tom Fanning, CEO of Southern Company

FORTUNE—“Sleepy” hasn’t been the right word for the electric utility industry in many years, but the business has felt particularly strong zaps lately. The Japanese earthquake and tsunami rewrote the future of nuclear power, which had been in the midst of a renaissance. The Environmental Protection Agency wants to impose the most stringent emissions rules the industry has ever faced. And the rapid development of shale gas in the U.S. could revolutionize electrical generation. These are tense times for any utility—especially one like Southern Co. (SO, Fortune 500), which is building a major new nuclear power plant near Augusta, Ga., and generates most of its electricity by burning coal. Running the enterprise since last December has been Tom Fanning, 54, who joined the company right out of Georgia Tech. He’s well prepared: Among his 14 previous jobs at the company have been CFO, CIO, strategy chief, and CEO of one of Southern’s operating companies, Gulf Power. It helps that Southern is the world’s most admired utility (tied with NextEra Energy in Fortune’s latest ranking) and by far the most valuable utility in America. Fanning talked recently withFortune’s Geoff Colvin about nuclear power’s future (bright), the smart grid (smart), those proposed new EPA rules (impossible), and much else. Edited excerpts:

Q: The Nuclear Regulatory Commission has just wrapped up hearings on your application for the first nuclear plant license in this country in 30 years. Is it the most important project at the company?

A: Sure, I think that’s pretty clear. I listed four or five priorities when I was named chairman, and one of them is associated with being successful at Plant Vogtle 3 and 4 [site of the new nuclear project; two other plants already operate there].

Your company and the whole nuclear industry have a lot riding on Vogtle. What makes you confident that you’ll avoid the cost overruns and delays that plagued the previous generation of nuclear plants in the ‘70s and ‘80s?

Start with the characteristics that put Southern in a paramount position to move forward on this renaissance of nuclear. We have scale. By market capitalization we’re the largest electric utility in the U.S. Think about this: Vogtle 3 and 4 is going to cost about $14 billion and will take about 10 years to build. So you don’t want to bet your company. We own 45.7% of Plant Vogtle, so it’s about $6.4 billion to our account. But we’re big enough to withstand that kind of financial pressure.

Another factor is credibility. We already run an excellent nuclear program. This is not a business for beginners. Also, it’s a different time in America. We need all the arrows in the quiver. We need new nuclear, coal, natural gas, renewables, energy efficiency. We have a constructive regulatory environment in our states and broad public support, all of which give us a stable environment in which to commit to a project of this scale. And the U.S. understands that moving forward with nuclear is a national imperative, so we’ve seengreat support out of the Obama administration and Congress.

A couple of other utilities have decided to get out of nuclear. Constellation (CEG, Fortune 500) got out of plant development earlier this year, and NRG (NRG, Fortune 500)  pulled out of its nuclear project in Texas. Is this just a case of differing business judgments, or is there something else?

It goes back to scale, credit quality, and credibility. When you think about the challenges that a small company will face building a $14 billion deal, that gets rather daunting.

The U.S. really is divided into two electricity markets. Some years ago many states deregulated, and they have what’s called merchant markets, where the price for electricity is largely set a day ahead or week ahead or month ahead. Remember this is going to take 10 years to build, and it’s going to be the largest capital asset in your portfolio, and you’re going to need to run it 30 to 50 years to earn that money back. Putting that magnitude of capital in a deregulated merchant market is exceedingly risky. Thankfully, Georgia Power operates in a vertically integrated regulated market where legislation and regulation are stable and constructive and will support this over time.

Southern Co. generates most of its electricity using coal, so you have a big interest in how emissions are regulated. What do you expect in coming years?

Southern Co. has invested more in environmental controls than anybody else in the U.S.—$8 billion—and we’ll invest between $2 billion and $4 billion in the current program by 2013. We’ve increased energy output about 40% since the ‘90s, yet we’ve reduced emissions 70%, and at our flagship units, the biggest, newest units we have, we’ll have reduced emissions about 90% by 2015. Four years ago we produced about 70% of our energy from coal. In the first quarter of this year it was about 51%, and by 2020 I think it’ll be in the low 40s, maybe 41%. The transition is already occurring. But we’ve got to find a viable way to consume this resource going forward.

The very first time I met with Energy Secretary Steven Chu, he was lamenting the fact that the Chinese had outstripped the U.S. in technological innovation. In this case they have not. Along with our partner, Kellogg Brown Root, we’ve developed a technology where we can gasify low-grade coal—about half of U.S. coal is low-grade coal—and strip off about 65% of the CO2, then take that CO2, push it underground, and push out more oil. With the remaining gas we’re going to run some electric technology and produce electrons. More domestic oil, more domestically produced energy, producing tax-base jobs. This is technology that we developed here. We’ve beaten the Chinese to the punch on this important development, and in fact we are licensing our domestically developed technology in China.

Whatever the new emission requirements may be, are we going to be using carbon capture and storage, or is there another way to deal with future requirements?

No one knows. There’s a collection of proposals today from the Environmental Protection Agency that, taken together, will have the effect of raising energy prices in the U.S., depending on where you live, 10% to 25%. They will force a significant closure of coal plants and could remove over a million jobs from the economy, reducing GDP about 0.9%. Why now, on the back of a challenged economy, do we want to put that burden on our customers? Why now, with unacceptably high unemployment, do we want to remove those jobs?

You’ve testified that those proposed regulations are unachievable on the proposed schedule.

That’s absolutely correct.

What happens if they go into effect anyway?

That’s a fascinating question. It just can’t happen. Southern Co. has built more scrubbers—environmental control equipment—than anybody else in the U.S. I think we’ve put in place 16 of these scrubbers. It takes about 54 months to build one. [Under the proposed rules] we have three years to complete them. It won’t work. Think about the magnitude of what they’re asking us to do. You can’t just shut down significant segments [of generation]. You’ve got to stage the outage schedule, the construction schedule, of these really big assets over time. EPA estimated that they would shut down, as a result of these rules, about 10,000 megawatts of electricity. The Federal Energy Regulatory Commission produced a study that said it’s going to be more like 81,000 megawatts before it’s all over. When EPA made their estimate of 10,000 megawatts, they said it would cost about $10.9 billion a year. Well, if it’s not 10,000 and it’s 81,000, what’s the cost? It’s enormous. We can’t do that.

Here’s another interesting question: If you start shutting down coal, what will you build? About 95% of all new generation since 1995 has been built with natural-gas-fired generation. That’s great. We’re all excited about the new finds of tight gas and shale gas, but there are real big issues here. There are environmental concerns around the practice called fracking, and we’ve got to resolve those. And that gas is not where we need the generation. We have to build infrastructure to move the gas from where it is to where it needs to be. I’ve gotten a couple of letters from the providers of interstate pipeline services in the Southeast. They say their capacity is completely filled, and it will take a minimum of 31D 2 years to build the infrastructure necessary to meet this transition. That won’t meet the time frame either.

Southern Co. has invested considerably in the smart grid. Earlier this year the CEO of another utility, Exelon, said the smart grid costs too much and we’re not sure what good it will do. What makes you confident it is a wise thing to pursue?

When we think about the smart grid, we think about it in three segments. One is what we call smart power. How can we achieve greater efficiency in converting a fuel source to an electron? We run the most efficient generating capacity in the U.S. So for smart power we take the traditional fleet, we add on renewables, and then we think about the future, where we might do a lot more distributed generation. Maybe you’ll have a solar cell in your house, or maybe you’ll have some other technology in your neighborhood that will be very efficient and friendly to customers.

The second segment is smart grid. To us that means wires—a transmission system, a distribution system, a little wire going to your house, culminating in smart meters. We have about 3.3 million smart meters deployed, and we’ll finish our deployment by the end of 2012 with about 4.5 million smart meters. We’ve been able to justify the deployment of that capital by removing meter readers from the field and trucks from the road. That’s good for bottom lines, and it’s good for the environment. We’ve invested about $1 billion in our transmission and distribution system with smart technologies and self-healing networks. When a lightning strike happens, you may have a blink, but it cures itself.

The third area is what we call smart choices. This is everything beyond the meter. We saw Google (GOOG,Fortune 500), Microsoft, and a host of others move in this space [with technology to let consumers manage home energy use]. I think that excitement is wearing off a little bit. [Google and Microsoft (MSFT, Fortune 500) shut down their offerings earlier this year.] I don’t know where these value chains will emerge or where Southern Co. will play. We’re making lots of little bets, doing pilots all over the Southeast, trying to see what makes sense for our customers.

What’s your usage data telling you about the state of the economy right now?

It’s fascinating. Since the recession our industrial recovery has actually been really good. Our industrial sales went up 7.7% in 2010 compared with 2009—a robust recovery. And then in the first quarter of 2011 compared with the first quarter of 2010—so comparing against a good year we’re up 4.9%. That’s pretty good. One factor is that export markets in the Southeast, particularly to China and Latin America, have been really strong. But the thing that hasn’t shown up yet is jobs. During the downturn we think a lot of our big industrial facilities took the opportunity to retool, and we think there’s been about an 18% increase in production efficiency. So we’re seeing an increase in sales, but jobs haven’t come. And in fact since the recession our residential and commercial sales have been relatively flat.

The Energy Information Administration forecasts that electricity demand will grow nationally at a slower rate over the next 25 years than it did over the past 25 years. What’s the reason for that?

Well, let’s think about that one. An area of emphasis for our R&D right now is electro-technology, supplanting other, worse forms of energy. There are obvious ways you do that. One way is electric vehicles. We spend $1 billion a day on foreign oil. You can fill up your electric vehicle today for about a buck a gallon equivalent. That makes sense to me. So let’s get that infrastructure out there and let’s get that going in a significant way.

When people talk about less per capita use, it’s based on the notion that we’re going to be much more energy-efficient. Southern Co. is a leader in that area, and we’re all for being energy-efficient, but I don’t buy the notion that that means we’re going to use less. In fact, if I can persuade customers to use electro-technologies more efficiently, I think I can gain share against other forms of energy, and it becomes a growth area for my company. So we’re investing a significant amount of R&D in the development of electro-technologies. I think it’s a good way to play offense.

The Leadership Series: Formerly called “C-Suite Strategies,” this is the latest interview with a top executive by Fortune senior editor-at-large Geoff Colvin. See video excerpts of this interview atfortune.com/leadership—plus find Colvin interviews with Charles Schwab, the team of Jeff Immelt (GE) and A.G. Lafley (P&G), Pimco’s Mohamed El-Erian, H arry Brekelmans of Shell, Nils Andersen of Maersk, and many more.

This article is from the November 21, 2011 issue of Fortune.

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DEREK DALY on Leadership at the Indianapolis 500

April 26, 2012 in Authors, derek daly, Inspiring Lives & Stories, Leadership speakers, Motivational Speakers

CLICK HERE TO LEARN MORE ABOUT DEREK DALY RACE AR CHAMPION & SPEAKER

Leadership at the Indy 500 for the teams who get themselves on the victory podium is specific and definite. There is a common thread to the behavior of leaders in the complex sport of auto racing. The 2011 Indy 500 showed that when good decisions are made the giants of the sport can be toppled. Some of the enclosed information is drawn fromPerformance at the Limit, a book written by a friend of mine, Richard West.

If we consider that successful auto racing teams achieve performance levels at the limits of their financial, technological and human potential, lets ask the question, how do they do that?

The motor sport industry encapsulates many of the challenges faced by today’s manager across many different types of organizations and sectors. Challenges such as increasing knowledge creation and transfer, working in global and virtual teams, managing across boundaries, enhancing innovation and creativity, accelerating speed to market, effective execution of strategy, creating transformational change and, above all, through all of these challenges, creating sustained levels of performance that competitors are unable to match.

What does the behavior of motor sports leadership look like:

They make a decision, live with it, and if it is the wrong one learn from it as quickly as possible and move on. Change for the sake of change is not embraced. It has to be realistic change for the sake of performance. The key for maintaining success is to actually disbelieve in the sustainability of your own performance. To continually feel that you could have done it better, and to continually strive for the unattainable goal.

Success requires a ‘portfolio of leaders’. In affect these teams succeed because there are individuals throughout the organization who are willing and capable to accept the responsibilities of leadership regardless of their formal authority.

All too often organizations lose sight of the external relativity of performance and focus too heavily on performance enhancements relative to their own internal benchmarks; in auto racing, performance benchmarking is always relative to the competition and a team’s performance is only as good as the last race. These factors create a context where there is no let-up in the search for both short – and long-term performance gains.

There is the constant pressure of competition and for successful motor sports teams a key issue is that standing still, means going backwards. Auto racing teams combine many different resources such as human capital, technology, marketing and finance to achieve a performance outcome that hopefully is superior to those of its competitors. The best leaders in auto racing integrate by providing flexibility and clarity for those within the organization. Successful auto racing teams are almost diametrically opposed to the big-business model. Nothing will be achieved through oppressive bureaucracy and burdensome processes.

Auto racing leaders look for people who think laterally, who never accept that something is impossible and who are prepared to work hard. They would be individualistic in their thinking, but team players in their action.

Auto racing is a complex and dangerous sport and its business model requires specific leadership, skill sets and attitudes. Successful auto racing teams have internal organizational speed of operations by combining two key elements; 1/ having the right people in the right positions doing the right things, and 2/ by removing the speed bumps that slow them down.

The auto racing high performance model when overlaid over other industry models might just be the ideal model for organizations that believe that the speed of business will continue to get faster in the next decade.

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Why Michael Treacy?… Speaker, Author and Consultant

April 26, 2012 in Authors, Leadership speakers, Speakers for Business Groups

CLICK HERE TO LEARN MORE ABOUT MICHAEL TREACY

Globalizing markets are the opportunity of a lifetime. The size of the middle-class is about to triple worldwide due to increasing standards of living across the globe. Companies that lean into the future and focus will dominate and increase scale, scope and power. Those who don’t are at risk. Michael Treacy shows leaders how to look at competition, customers, people, finance and markets in a new way – laying out the pathways for global growth and market leadership. Treacy is a veteran voice on such issues. In the 1990s he showed how to gain a competitive advantage through value leadership in his bestselling bookThe Discipline of Market Leaders. A decade later in Double Digit Growth he proved how rapid, steady and profitable growth can be dialed up on purpose. And now Treacy’s radically different thinking is again leading the way – helping leaders assess the global opportunity and face an unprecedented globalizing marketplace that brings with it an assault by upstart competitors who are smart, motivated and who take the long view. Treacy’s clear strategies help leaders in businesses large and small. He draws on over 30 years of experience as a researcher and adviser – he has helped some of the world’s best known companies achieve growth and innovate their way to greater profitability in unpredictable times. Treacy also takes his own medicine; the venturing arm of his consulting and research firm, Treacy & Company, applies his strategies to its portfolio of seven fast-growing companies. Each year they fund and launch at least one new start-up that has the prospect of being a game-changer in the markets they target. A former professor of management at the Sloan School of Management at Massachusetts Institute of Technology, Michael Treacy has published numerous articles over the past two decades in magazines and journals and is a frequent contributor to the Harvard Business Review.

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Michael Treacy – Global Growth and Innovation for a Global Market Place

April 19, 2012 in Speakers for Business Groups

CLICK HERE TO VIEW MICHAEL TREACY’S NEW VIDEOS AND TOPICS

MICHAEL TREACY SPEAKER, AUTHOR AND CONSULTANT

Michael Treacy is the President and founder of Treacy & Company. He brings over 30 years of experience helping companies achieve market leadership. Mr. Treacy’s ideas about customer value propositions and growth disciplines have been used by companies across the globe to reshape strategies, bolster competitive positions and dramatically improve top and bottom line performances.

Mr. Treacy’s views have been shaped by his rich experiences as an academic at MIT, as an advisor to some of the most successful firms of the past decade, and as an entrepreneur who has established and led several successful firms. In his career he’s encountered and surmounted almost every obstacle to achieving exceptional company performance and building extraordinary firms.

Michael Treacy’s books have gained international attention. In the 1990s he showed how to gain a competitive advantage through value leadership in The Discipline of Market Leaders a New York Times bestseller. It outlines the principles of leadership in a competitive marketplace – focused on an unmatched customer value proposition delivered through a unique operating model design. Many companies large and small have adopted these principles to drive their own business strategies and build competitive advantage. A decade later in Double Digit Growth, a Business Week bestseller, he proved how rapid, steady and profitable growth can be dialed up on purpose.

Now Mr. Treacy’s radically different thinking is again leading the way – helping leaders assess the global opportunity and face an unprecedented globalizing marketplace that brings with it an assault by upstart competitors who are smart, motivated and who take the long view.

With the size of the middle-class is about to triple worldwide due to increasing standards of living across the globe, they represent the opportunity of a lifetime. Companies that lean into the future and focus will dominate and increase scale, scope and power. Those who don’t are at risk. Michael Treacy’s clear strategies help leaders in businesses large and small – showing leaders how to look at competition, customers, people, finance and markets in a new way and laying out the pathways for global growth and market leadership. Michael Treacy also follows his own advice; the venturing arm of his consulting and research firm, Treacy & Company, applies his strategies to its portfolio of seven fast-growing companies with extraordinary results. Each year they fund and launch at least one new start-up that has the prospect of being a game-changer in the markets they target.

A former professor of management at the Sloan School of Management at Massachusetts Institute of Technology, Michael Treacy has published numerous articles over the past two decades in magazines and journals and is a frequent contributor to the Harvard Business Review. He is also currently engaged in a major research study to understand the performance discipline that allows certain companies to routinely achieve high performance – in growth, cost control, safety, or other important goals – while other firms struggle with uncertain results.

Mr. Treacy received his PhD. from MIT and his engineering degree from the University of Toronto. He has served as a board member for several leveraged buyouts and new ventures. Mr. Treacy resides in Needham, Massachusetts with his wife and three children.

Speech Topics Include:

“Market Leadership in a Globalizing Economy”

Globalization is a relentless march that affects every industry, every job function, every market segment and every company. Globalization of competition is both a threat to established leadership in developed markets and a once-in-a-lifetime opportunity for dramatic growth in developing economies. This is an overview of this new environment:

? Understand how upstart competition from developing markets look at the world differently and what it takes to blunt their inherent advantages.

? Recognize the signs when your market is about to globalize and what actions your firm must immediately take to get on an offensive footing.

? Explore the hidden costs of opportunistic dabbling in a developing economies and what it really takes to commit to market leadership in these markets.

? Discuss how local markets are shifting toward common standards of value and how that trend is shifting the optimal balance of locally customized vs. globally standardized offers.

? Understand how low cost upstart competition will reshape the customer value equation in domestic markets and make it more difficult to obtain traditional price premiums for superior products and services.

? See the potential to create a globe-spanning operating model, where the best capabilities from around the world can be lashed together to create advances in product innovation, demand generation, and product supply.

? Recognize the challenge of leaning into the future, all the while balancing the opportunities for greater short term profits in developed markets with the imperative of long term market leadership in an evolving world.

? Learn to avoid the five common mistakes companies make:

o Placing short term profit opportunity ahead of BRIC market leadership

o Targeting value propositions for where the market is today rather than where it is going

o Organizing for where the business has been rather than where the market is going

o Delegating international responsibility to foreign nationals

o Not learning and progressing at the speed of the market

“Strategy, Innovation & Growth in a Globalizing Economy”

Globalization of markets will bring broadly different companies into direct competition with each other all around the world. To win against this competition, a company will need to harness its knowhow and reach to rebuild globe-spanning capabilities for product innovation, demand generation, and product supply. This presentation provides a framework for moving forward:

? Explore how rising transportation efficiencies and coordination capabilities are tearing down market boundaries.

? Recognize the four stages of market globalization and how to avoid getting caught flat footed when your market transitions to the next stage.

? Gain the experiences and learnings of companies in naturally globalized markets, including travel, payments, and freight.

? Discuss the four capabilities along which markets globalize – product supply, demand generation, product innovation, and customer demand – and what will be the next driver of globalization in your market.

? Evaluate the rise of common customer demands for value worldwide and whether it is occurring in your market. The biggest variation from market to market is in the mix of customer segments, not the customers themselves. While some important local customs and traditions will endure, we are all more alike than we care to believe.

? Explore how to disable the Rise from the Bottom strategy employed by Hyundai, Sany, Ranbaxy and other upstart companies challenging for global market leadership; they build a base of demand through low prices, expand market reach with rising product quality, and then use product innovation to go head-to-head with established market leaders.

? Learn how other upstarts Globally Exploit a Local Advantage to achieve hyper-growth – including Wipro, Foxconn, and ICICI Bank – but are in a race against time before their advantages run out.

? Discuss the strengths and weaknesses of the Global Standards of Innovation strategy, deployed by companies such as Caterpillar, BMW and LVMH worldwide, in which the companies offer a common standard of product features and price premium worldwide under the assumption that markets will evolve to their standards. It’s a bet they aren’t likely to win.

? Learn how YUM! Brands and AO Smith have Localized their Global Expertise to gain a rapid advantage in developing markets and what advantages and disadvantages this globalization strategy holds.

“Leadership in a Globalizing Economy”

Achieving market leadership in a globalizing economy is the leadership challenge of a generation. When the dust settles, everything will be different – the composition of the management team, the design of core capabilities, the locus of operations – except the need for a single culture and a single standard of performance worldwide. Global market leadership will demand change on a scale that most organizations have rarely seen. Leaders at every level will benefit from this:

? Explore the need to construct a compelling case for action for moving from a multi-national to a global operating model and the important role of vision in creating and communicating an exciting picture of the organization’s future.

? Discuss alternative organizational structures and whether your structure reflects where the business has been or where your market is going.

? Understand how the globalization of operating models will dramatically change the locus of work and hiring needs around the world.

? Discuss the challenges and solutions to building a unified, high performance culture in an increasingly diverse workforce spread all over the world.

? Explore how to in-country leadership teams can be built that combine local knowledge with global knowhow – two-in-a-box leadership that partners local nationals with rising star expats.

? Understand how people recruiting and development must change as a business evolves from a multi-national structure to a global operating model.

“National Policy for a Globalizing Economy”

Market leadership in a global economy is the fight of a lifetime in which nothing less than the national interest is at stake. What must policy makers and shapers do to create national policies that ensure competitiveness, job gains, economic growth, and international prestige and security? There are new rules for the future:

? Understand how the United States lost market leadership in the textiles industry and with it, almost one million domestic jobs. Explore how national policies contributed to U.S. companies being unprepared to fight for global market leadership.

? Explore the role that wage rates, labor productivity, and fiscal policies play in a nation’s global competitiveness and how labor arbitrage from one country to the next is changing how companies think about where jobs should be located.

? Discuss the importance of innovation in driving labor productivity and how both the business environment and education system dramatically affect a nation’s ability to sustain innovation.

? Explore how four factors determine whether a business environment drives higher levels of innovation – competitiveness of domestic markets, ease of access to capital, labor flexibility, and levels of regulation – and how national policy shapes those factors.

? Discuss the important role that immigration policy and education capabilities serve in producing talent of superior skill and motivation and winning the global battle for jobs.

? Evaluate how corporate and individual tax policy affects where corporate headquarters, operations, and jobs are located.

? Explore the special advantage that the U.S. post-secondary education system provides to our national competitiveness and what we must do to improve that system in a globalizing economy.

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Jim Carroll on “80 OF THE BIGGEST NAMES IN CONSUMER GOODS JOIN TOGETHER TO MAKE BIG INDUSTRY PREDICTIONS”

April 18, 2012 in Guest Bloggers

CLICK HERE TO LEARN MORE ABOUT JIM CARROLL SPEAKER, TRENDS AND INNOVATION EXPERT & AUTHOR

Consumer Goods & Technology Magazine has just released their 2012 Review & Outlook Report – “”80 of the Biggest Names in Consumer Goods Join Together to Make Big Industry Predictions”.

I’m honoured to be one of those 80 contributors.

This year, they were focused on the major trends which would impact the consumer good space in 2012 and years to come. Here’s how I responded:

There’s a tremendous amount going on in the CG space, particularly with mobile, social and location. Packaging is about to become intelligent; the relationship that consumers have with products is becoming more interactive; the retail space is going to change in a huge a way as our cell phones become credit cards.

Put that into perspective, and I believe that the biggest issue that people within the industry need to think about is the speed of change that is occurring. If you think about the context of these trends, what is clearly happening is that CG companies are no longer setting the pace of innovation; it’s being driven at the speed of companies in Silicon valley.

Can they keep up with the blistering rate of innovation that drives high-tech companies? Can they respond fast enough to take advantage of opportunities or at the same time, ward off threats? A key phrase that I’ve been using for years is that “the future belongs to those who are fast.” I think for 2012, this is going to be a defining success factor for every single CG company.”

I think my message is resonating ; a few weeks ago, these folks confirmed me to headline another of their  major conferences in New York City in October 2012.

The future belongs to those who are fast!

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James Mapes on RETAILING, REBRANDING, RISK TAKING & J. C. PENNY

April 18, 2012 in James Mapes

CLICK HERE TO LEARN MORE ABOUT JAMES MAPES SPEAKER AND AUTHOR

If you are going to succeed in any business – in any arena – in todays competitive environment, you had better think out-of-the-box, embrace change and take some risk. That is exactly what the former Apple executive, Ron Johnson, has put into motion since he took over as CEO of J. C. Penney Co. last November.
Yes, they are cutting costs by cutting jobs but what else is new? What is unique is the idea of introducing three tiers of pricing in an anti-sales, permanent markdowns mentality that begins February 1st.

The point of any rebranding effort is to change the customer’s perception of a business. And never forget – perception is everything. For the retailer JC Penney, the rebranding is designed to make shopping easier and “treat the customers as we would like to be treated – fair and square.” says Ron Johnson. Thus it’s new “Fair and Square pricing philosophy.” Shades of Stew Leonard’s’ “The Customer Is Always Right” philosophy!
Adding into the mix, J. C. Penney has engaged one of television darlings, Ellen DeGeneres, as a brand ambassador. Penney will sell some of Martha Stewart products and fashion designer Nanette Lepore will create an exclusive line with the retailer. They have also created a new logo that expresses an enduring American brand by evoking the nation’s flag. That’s true creative thinking.

What impresses me most about Ron Johnson is that he is doing what I feel most executives fail to do. That is to ask the question: How are we going to reinforce our new brand and how are we going to continue to surprise and delight the customer? Ron Johnson has the future vision for the newly rebranded “jcpenney.”
Beginning in August, the newly rebranded jcpenney will begin a month-by-month, shop-by-shop strategy to update all stores with new and exciting merchandise and presentation. Two to three shops – dubbed “in-store boutiques” – will be installed monthly, each and every month, over a four-year transformation period. These initiatives will culminate in the complete transformation of jcpenney by the end of 2015.

So, if you are thinking about rebranding your business, you must challange your assumptions about everything you know, think out-of-the-box, take some major risks and envison a successful future by asking, “How am I going to continue to delight and surprise our customers?”

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Jones Loflin for Education & School Group

April 17, 2012 in Authors, Speaker for Education Groups

CLICK HERE TO LEARN MORE ABOUT JONES LOFLIN AUTHOR AND SPEAKER

Author of Getting the Blue Ribbon, co-author of the award-winning book, Juggling Elephants, successful educator, business owner, and speaker

Involve yourself in a presentation by Jones Loflin and you will quickly learn why he has become one of the most respected names in helping individuals and organizations deal with the challenges facing them today. His gift of communication combined with his wit and enthusiasm make for programs that are illuminating and unforgettable.

Clients are drawn to Jones because of his unique ability to develop and deliver practical programs that specifically address the complex needs of an organization. His strength is in providing simple strategies that enable individuals and organizations to pursue their goals with confidence and clarity. It’s no wonder that the most frequent comment heard by a meeting planner or a member of the Human Resources team after a presentation by Jones is “This is exactly what we needed!”

Drawing on skills honed as an educator, business owner, and speaker, Jones has created and conducted training programs for groups ranging from international corporations and trade associations to governmental agencies and educational institutions. Jones’ insightful programs make an impact instead of an impression because they regularly include the use of humor, powerful examples and frequent audience involvement and interaction. His client list includes Wal-Mart, Microsoft, Bayer Health Care, US Airways, Siemens International, Arrow Shirt, The Air Force and a host of other international business and education-related organizations.

In addition to his success as a speaker, Jones is an accomplished writer. His latest book, Getting the Blue Ribbon, offers a powerfully practical way to get better results in times of change. He is co-author of the award-winning book, Juggling Elephants, which is available in the US and in over 12 foreign countries. Jones’ first book, Prime Rib or Potted Meat?, is a humorous and thought-provoking collection of his ideas on getting more out of life. Jones is also a member of the American Society of Training and Development and National Speakers Association.

Jones also worked extensively as a speaker for the best-selling book, Who Moved My Cheese? In addition to delivering the program both nationally and internationally, he has trained individuals from over 14 different countries to take this powerful learning experience to their own organizations.

When asked about his approach to life, Jones responds by saying that “We should all be passionate about certain things in life, including our family, spiritual beliefs, career and relationships.” Jones is active in his community and because of his commitment to improving the lives of others, Jones has been presented the Distinguished Service Award by the Charlotte Jaycees.

Jones is President of Helping Others Prepare for Excellence, a business meeting the training and development needs of individuals and organizations. He resides in North Carolina with his wonderful wife, their two perfect daughters and two hyperactive Labrador Retrievers.

Speech Topics Include:

Why Build A Birdhouse?

Dubbed by audiences as a “breath of fresh air” to teachers, administrators or others involved in the education process, this hilarious and thought-provoking message will refuel the audience’s enthusiasm for education and for life.

Topics addressed include:

? Affirming the impact of their efforts on students, colleagues and the community
? Recognizing the need to balance professional and personal roles
? Striving for excellence instead of mediocrity

A New Year Begins… So What?

Ah yes, shiny hallways, clean rooms and a new school year. Teachers are motivated and the students are eager to learn. Unfortunately, all that positive energy will disappear by the third or fourth day of school, if that long. In this humorous and engaging presentation, Jones provides simple strategies to:

? Maintain focus as the intensity of the school year increases
? Create a positive attitude that focuses on solutions instead of problems
? Develop relationships with others that serve as a source of strength in difficult times
? Keep their role as educator in perspective with other roles in their life

Avoiding Burnout/Stress Reduction

Has teaching become a necessary evil in the lives of your educators? Something that simply seems to conflict with their personal endeavors? Perhaps they have just given so much to teaching but feel like they get so little in return. Whatever their situation, this solution is for them. Expect participants to leave this program with improved professional and personal focus as they take a humorous and thought-provoking look at their own internal obstacles to being their best both in and out of the classroom. Excellent inservice activity for teachers who have been teaching 3 weeks or 30 years.

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GEOFFREY COLVIN – Sam Palmisano’s legacy of leadership at IBM

April 17, 2012 in geoff colvin

Click here to learn more about Geoffrey Colvin, Speaker, Journalist and Author

The CEO steps down leaving his company in great shape. Will that legacy last?

FORTUNE—Really good CEOs are rare partly because they use all of their brains. Most people don’t. We carry around either massive left brains—logical, analytical, not very touchy-feely—or, more rarely in today’s world, we rely on big right brains—imaginative, feeling, intuitive, uncomfortable with algebra. Running a giant company obviously demands both, and the best business leaders can bat from either side of the plate. That group includes IBM chief Sam Palmisano who’s stepping down at year-end after nearly a decade as CEO, looking like a business Mickey Mantle. The business world’s ultimate endorser, Warren Buffett, announced recently he’d bought $10.7 billion of IBM stock, saying Palmisano has “delivered bigtime.”

In management the brain’s two halves are the financial side and the human side. Most managers, if they’re lucky, are really good with one or the other.

Palmisano was excellent with both. On the financial side, he understood what actually makes a company valuable, which I regret to report many CEOs do not. The clueless ones do dumb things like pay too much for acquisitions in an effort to plump earnings per share. Palmisano understood that it’s all about capital. He took capital out of businesses with poor returns and put it into businesses with high returns. For example, heoffloaded IBM’s disk drive business to Hitachi (HIT) and then made a five-year deal to buy Hitachi drives; realizing that drives were becoming a commodity, he decided he’d rather be buying them than selling them. He also bought about 100 companies, mostly small ones in the high-return-on-capital businesses of software and services. He squeezed working capital, an unglamorous tactic that pays handsomely.

As a result, IBM’s return on capital has increased from 4.7% when Palmisano got the job to 15.1% today, a tremendous achievement for a company of IBM’s size (estimated 2011 revenue: $107 billion). And as the company grew stronger while interest rates declined, IBM’s cost of capital fell, so the all-important spread between capital’s return and cost widened (data from EVA Dimensions). That’s a big reason IBM’s (IBM) stock is 82% higher than it was when Palmisano took over in 2002—higher even than its bubble-market peak.

2011 Businessperson of the Year

The human side of the CEO’s job is making sure those knockout results keep coming by developing tomorrow’s leaders. Palmisano realized that the most valuable learning is delivered not by a teacher but by the world. “We made a decision to walk out of the classroom and make sure most of the experiences were being lived at the operational level,” says Randall MacDonald, IBM’s HR chief through all of Palmisano’s tenure.

So the company increased its commitment to developmental assignments and invented new ones. For example, it created a Corporate Service Corps, which combines diverse young up-and-comers into teams that work with local leaders on local problems around the world. The employees get stretched and developed; IBM gets insight into their abilities.

Lots of companies send managers from developed economies to emerging ones. IBM also does the opposite, so those emerging- market managers get experience in a mature economy, preparing them for the future. Such efforts are a big reason IBM ranks No. 1 on the new global list of Top Companies for Leaders.

Are those practices worth the trouble and expense? No one can say for sure; much of the payoff from leadership development is far down the road. The larger point is that CEOs can’t be fully assessed when they retire because their decisions play out, for better or worse, over many years after they’re gone. Palmisano made major long-term bets on analytics, supercomputing, and the Smarter Planet initiative, which aims to harness all of IBM’s abilities to solve the world’s biggest social as well as business problems. The performance of his successor, Virginia Rometty, will also be a major element of his record.

So this is still a preliminary report. We have yet to see how well Palmisano managed IBM for tomorrow. But he’s going out like an all-star.

This article is from the December 12, 2011 issue of Fortune.

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