Friday, March 28, 2008

Happiness Habits

Being happy is of great importance to your success in life.

Having happy employees is essential to having a prosperous, thriving business.

So... how do you become "happy"?

In her book...

Happy for No Reason - 7 Steps to Being Happy from the Inside Out, Marci Shimoff shares her research.


Her conclusions, based upon numerous interviews?


Happy people can be described as...

• Having a sense of lightness or buoyancy

• Feeling alive, vital, energetic

• Having a sense of flow, openness

• Feeling love and compassion for yourself and others

• Having passion about your life and purpose

• Feeling gratitude, forgiveness

• Being at peace with life

• Being fully present in the moment


How to BE happy?


1. The Foundation—Take Ownership of Your Happiness

Focus on the Solution

Look for the Lesson and the Gift

Make Peace with Yourself

2. The Pillar of the Mind—Don’t Believe Everything You Think

Question Your Thoughts

Go Beyond the Mind and Let Go

Incline Your Mind Toward Joy

3. The Pillar of the Heart—Let Love Lead

Focus on Gratitude

Practice Forgiveness

Spread Loving kindness

4. The Pillar of the Body—Make Your Cells Happy

Nourish Your Body

Energize Your Body

Tune In to Your Body’s Wisdom

5. The Pillar of the Soul—Plug Yourself In to Spirit

Invite Connection to Your Higher Power

Listen to Your Inner Voice

Trust Life’s Unfolding

6. The Roof—Live a Life Inspired by Purpose

Find Your Passion

Follow the Inspiration of the Moment

Contribute to Something Greater Than Yourself

7. The Garden—Cultivate Nourishing Relationships

Tend to Your Relationships

Surround Yourself with Support

See the World as Your Family





Thursday, March 27, 2008

Dealing With Surprises

See...

Harvard: How to Predict Business Surprises & Disasters.


shakeltonhaulingr200.jpgWe write often about how the only thing predictable at a startup is — the lack of predictability. Today HBS Working Knowledge has has a quartet of essays on how you can anticipate surprises, manage disasters vis a vis your team, and ultimately, learn from failures when they occur. It’s a captivating series, being based on some historic events, and each essay has great instruction on leadership:

But the fourth essay, Planning for Surprises, has the most relevance for founders. Why focus on reacting to such disasters when you can anticipate or even avoid them?
Harvard writes:


“Predictable surprises [like Enron] happen when leaders had all the data and insight they needed to recognize the potential, even the inevitability, of major problems, but failed to respond with effective preventative action” … Here’s the good news: There are reasons why leaders fail to prevent predictable surprises and there are ways to identify trouble while there is still time to stop it.

A few of these reasons are…

I. The 3 Vulnerabilities:
A few classic factors, really types of vulnerability, “conspire to keep us from dealing with problems that are worthy of our attention,” the authors write.

  • Psychological vulnerabilities
: have to do with well-recognized biases in the way people think, such as self-serving illusions and overcommitment, as well as the tendency to stick with the status quo and to discount the future. (This is the: “I can do this, if i just keep trying/have more time,” despite previous results that suggest otherwise.)
  • Organizational vulnerabilities
: arise because of structural barriers to the effective collection, processing, and dissemination of information, such as the division of organizations into independently operating silos and the filtering of information as it passes up through the hierarchies. (This is the “lack of communication problem.” Are you getting—and giving—the information that you need?)
  • Political vulnerabilities
contribute to predictable surprises when a small number of individuals and organizations are able to “capture” the political system or organization for their own benefit. (This is about incentives. Do the people on your team have the same goals? Or are your interests competing?)

II. Cognitive biases
…“people tend to exist in a state of denial that leads us to undervalue risks. In addition, people overly discount the future, reducing our willingness to invest in the present to prevent some disaster that may be quite distant.”
(For more on cognitive bias, see Venture Hacks’ terrific summary of Marc Andreessen’s essay on the same, published earlier this week. Marc’s piece is based on the theories of Charlie Munger, a.k.a. Warren Buffett’s investing partner for 60 years.)

III. Fear of the Unknown / Love of the Status Quo
…“People also try to maintain the status quo [and] are more willing to run the risk of incurring a large but small-probability loss in the future rather than accepting a smaller, yet certain loss now. We don’t want to invest in preventing a problem that we have not experienced and can hardly bear to imagine. Thus, far too often, we only address problems after the surprise has occurred.”

So what can do?
Step 1: recognize where you are susceptible to the 3 Vulnerabilities
Step 2: identify your cognitive biases
Step 3: become willing to experience small, but certain, losses today. No more wishful thinking that low-likelihood bigger surprises won’t happen in future. Deal now.

And the BIG ONE

Step 4: Assume a ‘veil of ignorance’
This sounds strange, but the key issue here is to identify the difference between your hypotheses and your assumptions. Most of us make an assumption, where we really should be posing a hypothesis —- and then rigorously testing that hypothesis. To test appropriately, you must forget your pre-dispositions, your cognitive biases, your vulnerabilities and assume a veil of ignorance. Otherwise you won’t read the results correctly.

The authors write:

In practice it is difficult to assume complete ignorance. But it is essential to try to be conscious of the assumptions you are making about what is possible and critically what is not possible. To the extent that you can treat these as hypotheses to be rigorously challenged and tested, rather than as assumptions that are taken for granted, you reduce the potential to be predictably surprised. People always learn with a point of view; the key is to be open to altering that point of view in the face of reality.

For example, we question whether the Bush administration objectively considered the issue of weapons of mass destruction (WMD) in Iraq from an objective standpoint (under a veil of ignorance), or whether the administration started with a partisan perception and then avoided any reasonable challenge to this view. Richard Clarke, the former counterterrorism czar under Former President Clinton and President Bush, made a compelling case that the administration never escaped their desire to see the data as they wanted to see it.

They say ignorance is bliss. Well now, you’ve got a very good reason to make it one of your business tools, too. Following the steps laid out by these authors, ought to help you deal with small problems now, and avoid larger more devastating problems later on.

The complete essay, Planning for Surprises is based on the new book
Predictable Surprises: The Disasters You Should Have Seen Coming and How to Prevent Them by Max H. Bazerman (Harvard) and Michael D. Watkins (INSEAD).


Work Life Balance

Check out an interesting new book about work life balance, from at professor at the Wharton School at the University of Pennsylvania...

Stewart D. Friedman is the Practice Professor of Management at the University of Pennsylvania ’s Wharton School in Philadelphia. He is the founding director of Wharton’s Leadership Program and of its Work/Life Integration Project, and the former head of Ford Motor’s Leadership Development Center.

Total Leadership: Be a Better Leader, Have a Richer Life

Use these two self-assessment tools. To delve more deeply, read the Harvard Business Review article and visit the book website and other Harvard leadership resources.











Saturday, March 8, 2008

CEO Pay: Defending the Indefensible

A recent Congressional hearing analyzed CEO pay.

Large pay packets have been handed out to executives whose companies have even stumbled or failed.

Forbes magazine said CEO pay averaged $15.2 million for the CEOs in the largest 500 U.S. companies in 2006, an increase of 38 percent in one year.

All three CEOs questioned at the hearing profited handsomely at a time when their companies were losing billions of dollars and stock values were plunging.

"It's only in the wacky world of CEOs where you get severance for failing," said Nell Minow, editor of The Corporate Library and one of the economic experts testifying.

Committee figures showed that Countrywide Financial suffered a $1.2 billion loss in the third quarter of 2007 and then lost another $422 million in the fourth quarter. By the end of the year, the company's stock had fallen 80 percent from its five-year peak in February. During the same period, Angelo Mozilo received a $1.9 million salary, $20 million in stock awards contingent upon performance and sold $121 million in stock. Some of those stock sales occurred at the same time the company was borrowing $1.5 billion to repurchase its shares. Mozilo also insisted - as documented in a November 2006 e-mail - that he be reimbursed for taxes owed when his wife traveled on Countrywide's corporate jet.

Separately, the FBI is looking into fraud allegations against Countrywide Financial Corp., a U.S. government official told CNN. The probe reportedly is examining underwriting and mortgage origination practices, and whether the company misrepresented losses related to subprime loans.

Stanley O'Neal, formerly of Merrill Lynch & Co., received a retirement package of $161 million when he was pushed out as Merrill Lynch CEO last October. But the committee said that if the company had terminated O'Neal for cause rather than letting him retire, he would not have been entitled to $131 million of that in unvested stock and options. During 2007, the firm reported $18 billion in writedowns related to subprime and other risky mortgages. O'Neal countered that he had received no bonus in 2007 and no severance pay.

[Update: 4/17/08 It's too bad O'Neal received no bonus and no severance pay. Today the company announced it was laying off 4,000 workers after posting a steep loss related, in part, to his mismanagement. That means that 4,000 workers have no bonus, no severance pay... no salary and no job. But he kept the $161 million.]

[Update - July 17, 2008 See news article below: Merrill Lynch reports $4.9 billion loss. Nation's largest brokerage suffers its fourth-straight quarterly loss. Great job there, Stanley O'Neal!]

[Update: 9/15/08 Merrill Lynch is no more... see below.]

Citigroup, which saw its stock fall 48 percent at the end of 2007 compared with a year earlier, awarded Charles Prince a cash bonus worth $10.4 million after he stepped down as CEO last November. He also received $28 million in unvested stock and options and $1.5 million in annual perquisites upon his departure.

[Update: 4/18/08 Citigroup posts loss, cuts 9,000 jobs, on top of the 4,200 cuts announced during the previous quarter. Financial services giant records $5.1 billion loss and more than $13 billion in writedowns, and says it will eliminate more positions. Last quarter, the company reported a eye-popping $9.83 billion loss - the worst quarterly loss ever recorded in the 196-year-history of the firm and its predecessors.]

[Update: 7/18/08 Citigroup posts $2.5 billion second-quarter loss. The net loss totaled 54 cents per share and compared with a year-earlier profit of $6.23 billion, or $1.24 per share. The bank reduced its work force by 6,000 during the quarter, bringing its job cut total to 11,000 for 2008. Citigroup has failed to turn a profit for three straight quarters now. Its shares have tumbled 65 percent over the past year, and recently hit their lowest point since the day Citicorp and Travelers combined in October 1998. Of course, Charles Prince kept the $39.9 million pay package.]

Several of the executives did acknowledge public resentment over the fact that large company CEOs now receive about 600 times what the average worker earns, compared to about 40 times in 1980.

Apparently, Gordon Gekko lives on!

"Greed, for lack of a better word, is good. Greed is right. Greed works. Greed clarifies, cuts through, and captures the essence of the evolutionary spirit. Greed, in all of its forms, greed for life, for money, for love, knowledge has marked the upward surge of mankind."

-------------------------------

Merrill Lynch reports $4.9 billion loss

Nation's largest brokerage suffers its fourth-straight quarterly loss, confirms plans to sell Bloomberg stake for $4.43 billion.

By David Ellis, CNNMoney.com staff writer

Last Updated: July 17, 2008: 7:30 PM EDT

NEW YORK (CNNMoney.com) -- Merrill Lynch booked its fourth-straight quarterly loss Thursday, this time losing nearly $5 billion, as the nation's largest brokerage was forced to once again take massive writedowns.

Merrill said it lost $4.9 billion overall. On a continuing operations basis, it lost $4.6 billion, or $4.95 a share, down from a profit of $2.01 billion, or $2.24 a share a year ago. Analysts polled by Thomson Reuters were expecting the company to report a loss of just over $1.8 billion, or $1.91 a share on this basis.

The company has now lost more than $19.2 billion in the past twelve months, making it one of the hardest hit companies during the credit crisis roiling the nation's big financial services firms.

Merrill (MER, Fortune 500) shares plunged about 6% after hours, nearly wiping out the stock's 10% gain in regular trading on the New York Stock Exchange Thursday.

Driving the loss was yet another round of writedowns. Merrill took a $4.8 billion mark on its mortgage-related portfolio, a $2.9 billion writedown due to its exposure to the recently downgraded bond insurers Ambac (ABK) and MBIA (MBI), $1.7 billion in its investment portfolio of U.S. banks and $348 million related to leveraged loans.

That surpassed the nearly $6 billion total that some analysts were anticipating heading into this week's results.

"Is the company a good franchise? It's a very good franchise," said Brad Hintz, senior analyst at Sanford C. Bernstein & Co. "The problem you have is it will be a long time until that balance sheet is clean."

Those marks hit Merrill's global markets and investment banking divisions particularly hard, as it suffered a pre-tax loss of $8.56 billion in the quarter from continuing operations.

Merrill's global wealth management business remained profitable, but its earnings fell 16% from a year ago.

"Our core franchise continues to perform well despite the extremely challenging market environment," said John Thain, Merrill's chairman and chief executive officer in a written statement.

Merrill also took a pre-tax charge of $445 million due to staffing cuts. During the quarter, the company said it trimmed its ranks by 3,100, slightly more than it anticipated when it first announced the planned cuts in April. At the end of the quarter, Merrill's total employee count stood at 60,000.

The New York City-based firm also revealed that it would sell its 20% stake in the media outlet Bloomberg LP for $4.43 billion to Bloomberg Inc., confirming long-running speculation that it would sell assets in order to raise capital.

Merrill added it reached a tentative agreement over the sale of a controlling interest in the financial services administrator Financial Data Services for more than $3.5 billion.

Ongoing deterioration in the housing market, mounting troubles in the economy and pressure from regulators has prompted brokerages, Wall Street firms and banks of all sizes to raise additional capital.

But Merrill said it is holding onto its 49% stake in asset manager BlackRock (BLK, Fortune 500). Larry Fink, BlackRock's CEO, revealed earlier Thursday during his company's quarterly earnings release that the two firms would stay together. BlackRock reported a 23% increase in its earnings, beating expectations.

Thain, just 8 months into his tenure as CEO, told analysts during a conference call Thursday evening that the company was in a "comfortable spot" in terms of capital, following the two sales.

But Merrill's latest loss raised a red flag for one rating agency. Moody's downgraded Merrill's senior long-term debt rating Thursday evening following Merrill's report.

"Management's options to sell assets or raise more common equity to offset unexpected losses are now reduced given the difficult industry and capital markets environment," wrote Peter Nerby, a senior vice president at Moody's in a note.

Thain, the former NYSE Euronext CEO and Goldman Sachs alum, did not rule out the sale of its stake in BlackRock in the future should the company need to raise additional capital.

But he suggested, however, that the company would probably consider alternatives before making such a move.

"There are, in fact, other options on our balance sheet," said Thain.

Merrill is the latest financial firm to deliver second-quarter results this week.

--------------------------------------------

Is this a surprise? If so, to whom?

Merrill Lynch is no more


Merrill Lynch agreed to be acquired by Bank of America for $29 a share, or $43.5 billion, after being pressured into a deal by federal regulators.

From the New York Times, September 15, 2008...

“It is an enormous shock,” said Steve Fraser, a Wall Street historian and author of “Wall Street: America’s Dream Palace.”

“Merrill was a kind of bedrock institution whose stability and longevity was taken for granted and was reassuring to people,” Mr. Fraser said. “Even in these very highly erratic and speculative marketplaces like we’ve been living through, you didn’t think Merrill would be vulnerable.”

Merrill, the nation’s largest brokerage firm, was one of the earliest Wall Street firms to go public, in 1971. Its executives, traditionally former stockbrokers, have long been viewed as spokespeople for the entire industry. After the crash of 1987, for instance, Merrill’s chief executive appeared on a television commercial and used one of the company’s long-time slogans, saying: “Merrill Lynch is still bullish on America.”

The investment bank has taken more than $45 billion in write-downs, a figure that is two times more than all the profit Merrill made in the two and a half years before the credit crisis. The charges have pushed Merrill Lynch deep into the red and forced the company to lay off 4,000 workers. Merrill has raised more than $15 billion in additional capital to strengthen its financial position but has struggled to regain investors’ confidence.

“A hundred guys flew this firm into a mountain,” said a broker who works for Merrill in California and asked to remain anonymous because he did not have permission to speak with reporters. “It’s really sad. Now we’re going to be a bank like every one else.”

As recently as last Wednesday, John A. Thain, chief executive of Merrill Lynch was still out selling the Merrill story. He met with worried employees financial advisers in Minneapolis as part of a series of town halls he has been holding to answer employee questions. Mr. Thain reassured them about the company’s capital base, dwindling level of worrisome assets, and the value of Merrill Lynch’s businesses, according to someone who attended.

And he told them that the pain looked like it would end by 2009.

-----------------------------

Friday, March 7, 2008

Book: The NEW Asian Hemisphere

Here is a must read about the new emergence of Asian global power across all domains...

The New Asian Hemisphere: The Irresistible Shift of Global Power to the East

by Kishore Mahbubani

A great read for stimulating thought about an important current social development...

A NEW Slogan

I just heard this today... it comes from a group at MIT... it is my new personal slogan...

"WE are the people we have been waiting for!"