I was reading that timely article on the management lessons that can be drawn from the very public Conan O'Brien-Jay Leno spat, over "The Tonight Show".
One of the main management lessons to take away from this messy episode, is how poorly the NBC management has handled the whole situation, which include a very poorly made decision back in 2004 to promise O'Brien to take over the show from Leno in 2009. The world has changed in those five long years, not the least contributed by the failed experiment to move Leno to the 10pm time slot, and thus O'Brien to the 11:35pm spot. Neither worked, and both guys sank. In the midst of it, NBC threw O'Brien under the train, and tried to hustle Leno back to his old 11:35pm spot. O'Brien refused to leave, without putting up a fight, or at least a very public rebuff on how NBC has slighted (more like humiliated) him, by pushing him off.
Well, business decisions are business decisions. If Leno didn't make out at 10pm, and O'Brien did even worse at 11:35pm, something has to be done. I fully understand that. But given the 2004 NBC promise to O'Brien that he would have the show at 11:35pm in 2009, and that NBC tries to finagle its way out of the deal, is rather hard to argue for.
If anyone should be pushed under the train, those in NBC management who made the 2004 promise and arrangement, should have been the first ones to go under the train. Morally speaking, that's the right thing to do. Sure, O'Brien will still have to be dragged out, kicking and screaming, but at least he can't claim the mantle to be the first one to get the axe.
That's a very sensible management lesson.
In the larger scheme of things, the same management mistakes are playing out all over corporate America though. Judged by the upfront, hugely outsized CEO packages that corporate boards have promised their CEO when they come on board, only to find out that the CEO is incompetent at best, and they would have to be very gently pushed out of the door, with lots and lots of dough from the shareholders.
Truth be told, there's really no sure bet to ensure that a CEO (or another O'Brien) can really pull a hat trick, like Steve Jobs has done to Apple. But what the board can do, at the very least, is to ensure they don't overpay, and performance is measured over a longer term horizon, and compensation is measured by long-term performance (at least five years out). And why would anyone feels compelled to pay hundreds of millions of dollars to an unproven CEO, upfront, anyways?
Warren Buffet has it exactly right: That there must be a downside to the CEO, or the CEO has no skin in the game. At least there's someone who talks sense in corporate America. Too bad there's only one Buffet.
Friday, January 22, 2010
On musing over closing of bookstores...
I was feeling a little sad when I read the article of the closing of another bookstore, this time in a big city in Texas, leaving the city without a bookstore.
Our neighbor is pretty well-to-do, with alot of well-endowed universities, hospitals, corporates, and research institutes in the vicinity. About 1.5 years ago, Barnes & Nobles closed its store in the main street. We still have another much bigger Barnes & Nobles store close-by, but not without walking distance.
My kids love going to that B&N store. We spent alot of afternoons there. As the neighborhood is well-educated and very family-friendly, alot of families with young children went there too. From the look of it, that store was making money. (It's a very busy store.) We often bought books and accessories there too. But while it baffles me, as to why B&N closed this particular store, I'm not surprised by the larger trend of moving the book-selling business online. Afterall, there's alot of upkeep and overhead in maintaining a physical store.
Coming back to that article, when alot of the local folks interviewed expressed their dismay that maybe the store closing is reflecting some covert discrimination that the town has alot of immigrants and what-not. Looking at what B&N did to the store in our neighborhood, I don't think it's that plain-and-simple (with decisions solely based on audience mix). If B&N has to compete with Amazon.com, it has to reduce its overhead. Closing stores, even profitable ones, is perhaps the lowest hanging fruit.
These days, we use the local public library mostly. It's a wonderful place, with lots of books too (though not for sale and maybe not the latest first-prints), and very family-friendly too. After we read a book, and we like it, I would go online and buy it. From time to time, I make donations to the public library too, so that they have fundings to buy new books. That's probably one way to support the book-publishing business which, like the newspaper business, has its whole business model threatened by the parallel universe online.
In a way, it's a better way to me too, since we can save on the papers and printing (as we don't have to have everyone owning their own copy of a book). Perhaps those interviewed in the article who lament not having a bookstore, should save their energy to petition for the existence of a bookstore, and show their support to their local public library instead.
Our neighbor is pretty well-to-do, with alot of well-endowed universities, hospitals, corporates, and research institutes in the vicinity. About 1.5 years ago, Barnes & Nobles closed its store in the main street. We still have another much bigger Barnes & Nobles store close-by, but not without walking distance.
My kids love going to that B&N store. We spent alot of afternoons there. As the neighborhood is well-educated and very family-friendly, alot of families with young children went there too. From the look of it, that store was making money. (It's a very busy store.) We often bought books and accessories there too. But while it baffles me, as to why B&N closed this particular store, I'm not surprised by the larger trend of moving the book-selling business online. Afterall, there's alot of upkeep and overhead in maintaining a physical store.
Coming back to that article, when alot of the local folks interviewed expressed their dismay that maybe the store closing is reflecting some covert discrimination that the town has alot of immigrants and what-not. Looking at what B&N did to the store in our neighborhood, I don't think it's that plain-and-simple (with decisions solely based on audience mix). If B&N has to compete with Amazon.com, it has to reduce its overhead. Closing stores, even profitable ones, is perhaps the lowest hanging fruit.
These days, we use the local public library mostly. It's a wonderful place, with lots of books too (though not for sale and maybe not the latest first-prints), and very family-friendly too. After we read a book, and we like it, I would go online and buy it. From time to time, I make donations to the public library too, so that they have fundings to buy new books. That's probably one way to support the book-publishing business which, like the newspaper business, has its whole business model threatened by the parallel universe online.
In a way, it's a better way to me too, since we can save on the papers and printing (as we don't have to have everyone owning their own copy of a book). Perhaps those interviewed in the article who lament not having a bookstore, should save their energy to petition for the existence of a bookstore, and show their support to their local public library instead.
Wednesday, January 20, 2010
On Democrats using the Kennedy's senate seat...
It's good to see change is in the air. No, I'm not talking about those "yes, we can" change from Obama. (Was there any, really, anyways? If there ever was, it's not observable to me.) I'm talking about the special election in Massachusetts yesterday that turns the senate seat over from 58-year run (all in the Kennedy family) to a little-known Republican. It's quite a change indeed.
Much was read into the tea leaves of the election results, from the people's mandate (and appetite) to the proposed health care reform, to the Obama presidency on its anniversary, to the Democrat's hold on a 60-vote senate majority.
Yesterday, our household contributed two additional votes to Scott Brown. What angers me, sometimes, is how clueless all these post-election polls that hugely misrepresent the results, or try to read whatever trival notes to it, among which:
(a) All the talk on Ted Kennedy, and how Massachusetts are supposed to be sentimental to the late Ted, is simply white noise to me. Sure, it's sad that someone died. I don't really what Ted or anyone in the Kennedy family thinks or wants, but I sure know what I want. I don't give a damn if Ted wants a legacy or not, but this is a Massachusetts' senate. It's not a Ted Kennedy's seat. Period. It's exactly how I feel about the endorsement by Ted Kennedy, Caroline Kennedy, and just about every single member in that family does, for Obama, then a presidential campaign. Much as I said then, as it is now, their endorsement has not one iota of impact of my decision for a presidential candidate. The fact that every poll and mainstream media read so much into such stupid endorsements still baffles and enrages me.
(b) Yes, my husband and I both vote this time, on the main issue of health care. And no, we don't vote GOP to invalidate the idea of universal health care. But we vote to GOP to send a message that "yes, we like universal health care; but no, we don't like the proposal in the senate." Howard Dean has it right: If there is no public option, then there's no real meaning in this health care reform to me. The Dem senate and Obama just want to pass a health care bill, for the sake of claiming the mantle of making some health care reform. As it is now, the proposal is simply a proposal to force people to buy private insurance, with no other recourse. I don't want that. As Dean has it, a health care bill with no public option is not worth passing.
(c) Our household is one of those majority in MA: Independents. Obama and Dem would have everyone hoped and believed that MA is a solidly blue state, is just sooooo wrong-headed. While MA voters are generally more liberally minded, I don't think we all blindly vote for Dem, just because the party or the unions put their rubber stamps on a candidate.
(d) Obama has failed it time and again, that his show of support to whatever fledgling candidates, from Martha Coakley, to the now-failed gubernatorial candidates in Virginia and NJ, fails to galvanize whatever support that Dem (or Obama) is supposed to have. Do they really have to be told, yet one more time, that we the voters vote for issues, rather than for a party (or a face)? Are they really that clueless to figure that out. From all the post-election bruhaha of poll analysis, it doesn't look like they get it, still.
So, there you have it. I got these out of my chest.
Much was read into the tea leaves of the election results, from the people's mandate (and appetite) to the proposed health care reform, to the Obama presidency on its anniversary, to the Democrat's hold on a 60-vote senate majority.
Yesterday, our household contributed two additional votes to Scott Brown. What angers me, sometimes, is how clueless all these post-election polls that hugely misrepresent the results, or try to read whatever trival notes to it, among which:
(a) All the talk on Ted Kennedy, and how Massachusetts are supposed to be sentimental to the late Ted, is simply white noise to me. Sure, it's sad that someone died. I don't really what Ted or anyone in the Kennedy family thinks or wants, but I sure know what I want. I don't give a damn if Ted wants a legacy or not, but this is a Massachusetts' senate. It's not a Ted Kennedy's seat. Period. It's exactly how I feel about the endorsement by Ted Kennedy, Caroline Kennedy, and just about every single member in that family does, for Obama, then a presidential campaign. Much as I said then, as it is now, their endorsement has not one iota of impact of my decision for a presidential candidate. The fact that every poll and mainstream media read so much into such stupid endorsements still baffles and enrages me.
(b) Yes, my husband and I both vote this time, on the main issue of health care. And no, we don't vote GOP to invalidate the idea of universal health care. But we vote to GOP to send a message that "yes, we like universal health care; but no, we don't like the proposal in the senate." Howard Dean has it right: If there is no public option, then there's no real meaning in this health care reform to me. The Dem senate and Obama just want to pass a health care bill, for the sake of claiming the mantle of making some health care reform. As it is now, the proposal is simply a proposal to force people to buy private insurance, with no other recourse. I don't want that. As Dean has it, a health care bill with no public option is not worth passing.
(c) Our household is one of those majority in MA: Independents. Obama and Dem would have everyone hoped and believed that MA is a solidly blue state, is just sooooo wrong-headed. While MA voters are generally more liberally minded, I don't think we all blindly vote for Dem, just because the party or the unions put their rubber stamps on a candidate.
(d) Obama has failed it time and again, that his show of support to whatever fledgling candidates, from Martha Coakley, to the now-failed gubernatorial candidates in Virginia and NJ, fails to galvanize whatever support that Dem (or Obama) is supposed to have. Do they really have to be told, yet one more time, that we the voters vote for issues, rather than for a party (or a face)? Are they really that clueless to figure that out. From all the post-election bruhaha of poll analysis, it doesn't look like they get it, still.
So, there you have it. I got these out of my chest.
Tuesday, January 19, 2010
On business dealings and moral principles...
It's not too often to see corporates to stand up (or show some backbone) when it comes to business (ie. money/market). So it comes as pleasant surprises to see more than one such incidences in the span of a month.
Such was the spat between Conan O'Brien and Jay Leno for the NBC's "The Tonight Show" and the time slots that they're in.
Such was also the cyber-attack on Google users (human rights activists, journalists, etc) in China, allegedly by the Chinese government, with Google threatening to stop filtering its search results, and even pulling out of the China market altogether.
Not that I have much care about Conan O'Brien or Jay Leno. Afterall, I don't watch TV, and I don't find O'Brien that funny anyways, judging from the various clips of his shows on YouTube. But his refusal to stand down from the NBC management in elbowing him off of the promised time slot, thereby giving it back to Jay Leno, is indeed admirable. That's probably the main reason why most people stand behind O'Brien in this episode. To say the least, the low ratings from O'Brien's and Leno's new shows show them both to be failures in their new time slots. It goes to show, too, that NBC management is tactless and clueless. Have them even done market research to see how audience might perceive O'Brien and Leno might do in the new slots? We were never told (which probably means there wasn't any done). No matter, it now all boils down to how O'Brien is treated, and badly indeed.
The same is true with Google. Afterall, Google hasn't gained much traction in the Chinese market, and its miniscule impact on the bottomline after years of attempts reinforces it to be a failure, given the all-almighty Google. No matter, it now boils down to the fact that it's standing up against the even bigger threat of a communist Chinese government, and suddenly it's standing by its "Do No Evil" motto. Where was this motto when Google decided to enter the China market, and filtered search results to please the government, we were not told. Google suddenly became victorious as the "small guy" against the Chinese government, much like O'Brien against NBC (and Leno).
Sure, all these gave them (Google and O'Brien) a more than graceful exit from some disastrous foray. Afterall, O'Brien is going to get $40 million to kiss NBC goodbye - not bad for kicking and screaming when you're kicked off of the stage, metaphorically.
Still, it requires certain backbone on the part of Google and O'Brien to throw those spats publicly. Afterall, nobody thinks it's a good idea for Google to exit such an important market of China with growth far exceeding US and the western countries. It's certainly not a good long-term strategy. If they brown-nose long enough, maybe the communist government might even fall on its knee like USSR did.
Such was the spat between Conan O'Brien and Jay Leno for the NBC's "The Tonight Show" and the time slots that they're in.
Such was also the cyber-attack on Google users (human rights activists, journalists, etc) in China, allegedly by the Chinese government, with Google threatening to stop filtering its search results, and even pulling out of the China market altogether.
Not that I have much care about Conan O'Brien or Jay Leno. Afterall, I don't watch TV, and I don't find O'Brien that funny anyways, judging from the various clips of his shows on YouTube. But his refusal to stand down from the NBC management in elbowing him off of the promised time slot, thereby giving it back to Jay Leno, is indeed admirable. That's probably the main reason why most people stand behind O'Brien in this episode. To say the least, the low ratings from O'Brien's and Leno's new shows show them both to be failures in their new time slots. It goes to show, too, that NBC management is tactless and clueless. Have them even done market research to see how audience might perceive O'Brien and Leno might do in the new slots? We were never told (which probably means there wasn't any done). No matter, it now all boils down to how O'Brien is treated, and badly indeed.
The same is true with Google. Afterall, Google hasn't gained much traction in the Chinese market, and its miniscule impact on the bottomline after years of attempts reinforces it to be a failure, given the all-almighty Google. No matter, it now boils down to the fact that it's standing up against the even bigger threat of a communist Chinese government, and suddenly it's standing by its "Do No Evil" motto. Where was this motto when Google decided to enter the China market, and filtered search results to please the government, we were not told. Google suddenly became victorious as the "small guy" against the Chinese government, much like O'Brien against NBC (and Leno).
Sure, all these gave them (Google and O'Brien) a more than graceful exit from some disastrous foray. Afterall, O'Brien is going to get $40 million to kiss NBC goodbye - not bad for kicking and screaming when you're kicked off of the stage, metaphorically.
Still, it requires certain backbone on the part of Google and O'Brien to throw those spats publicly. Afterall, nobody thinks it's a good idea for Google to exit such an important market of China with growth far exceeding US and the western countries. It's certainly not a good long-term strategy. If they brown-nose long enough, maybe the communist government might even fall on its knee like USSR did.
On Obama, MLK, and racial relations...
The one-year anniversary of Obama's sworn in to office and the MLK day, the time is ripe for reflection on the racial relations matter.
I had not bought in to all the hype surrounding Obama the candidate, nor Obama the president. Many people did not share this view, thinking that electing a black president (or rather, half-black, fair-skinned black) would bring sea-change to the racial relations in US. As I never have any high hopes on Obama in this regard, I never experience the kind of let-down that an increasing number of people are feeling right now.
It's true that the number of problems plaguing this country are big and deep. To say the least, we have the Great Recession (mirroring Great Depression in the 1920s). There is the health care reform that no president seems to be able to overcome. There is declining quality in education system. With unemployment at 10%, people have plenty to worry about (eg. can we pay the bills this month), much less how the racial relations have been faring, as the "promised land" to the blacks by electing a black president to office. To me, if I had not known this president, I would not have known any of his policies or proposals to differentiate him, one way or the other, from his heritage or lineage. Afterall, he was Barry Obama before he got "religion," and he's whiter than more people would have given him credits for.
Indeed, the expectations on Obama can be almost unrealistic. Do the blacks really think that a black president is going to solve all their woes? Do they really think that, by having a black president, they have a ticket in life, by proxy? From my vantage point, I guess the only real difference is that, he can serve as a role model to black kids. But Obama will not solve the conundrum of broken families and abuses that alot of black kids suffer, nor the lower expectations that society has on them. (How many a times when standards are lowered, in the hope of letting the kids pass the "exam," so that they can graduate, rather than the other way round?)
In short, MLK's dream still resonates, because the blacks are far from reaching their promised lands. A president has to rule from the middle. It's unrealistic to expect to see much real change from Obama. Fundamental changes have to come from the bottom (ie. the people, the blacks themselves), and not from the top (Obama).
I had not bought in to all the hype surrounding Obama the candidate, nor Obama the president. Many people did not share this view, thinking that electing a black president (or rather, half-black, fair-skinned black) would bring sea-change to the racial relations in US. As I never have any high hopes on Obama in this regard, I never experience the kind of let-down that an increasing number of people are feeling right now.
It's true that the number of problems plaguing this country are big and deep. To say the least, we have the Great Recession (mirroring Great Depression in the 1920s). There is the health care reform that no president seems to be able to overcome. There is declining quality in education system. With unemployment at 10%, people have plenty to worry about (eg. can we pay the bills this month), much less how the racial relations have been faring, as the "promised land" to the blacks by electing a black president to office. To me, if I had not known this president, I would not have known any of his policies or proposals to differentiate him, one way or the other, from his heritage or lineage. Afterall, he was Barry Obama before he got "religion," and he's whiter than more people would have given him credits for.
Indeed, the expectations on Obama can be almost unrealistic. Do the blacks really think that a black president is going to solve all their woes? Do they really think that, by having a black president, they have a ticket in life, by proxy? From my vantage point, I guess the only real difference is that, he can serve as a role model to black kids. But Obama will not solve the conundrum of broken families and abuses that alot of black kids suffer, nor the lower expectations that society has on them. (How many a times when standards are lowered, in the hope of letting the kids pass the "exam," so that they can graduate, rather than the other way round?)
In short, MLK's dream still resonates, because the blacks are far from reaching their promised lands. A president has to rule from the middle. It's unrealistic to expect to see much real change from Obama. Fundamental changes have to come from the bottom (ie. the people, the blacks themselves), and not from the top (Obama).
Friday, January 8, 2010
On China becoming the largest auto market in 2009...
I was reading the article today about how China has surpassed US to become the world's largest auto market in 2009. It sure is an amazing milestone.
The sheer size of that market (by headcount) is enough to turn any heads. There's this popular metaphor that was used to describe the potential significance of the market in China: If you're a sock company, and imagine every one of the consumers in China would buy just one pair of socks from you. Even if you charge really, really low price for the socks, the absolute dollar value of the sales could still blow you away.
In a country like China, when its denizens are so lack of alot of material goods that have long been taken for granted in the western world, the collective rising wealth would certainly mean much sales in alot of different categories, from the basic daily necessities, to the luxury items.
But I have always had some lingering doubts at the back of my mind. For, in a country where a large majority of its citizens are still rural and living below poverty line, how much can they afford to buy is still a question that I haven't seen the answers on, from all the rosy analyst's and news reports. There is also this question of how "collective" the rising wealth is. Surely, most Chinese are avid savers, given that social safety net is almost non-existent, it's prudent to save more than necessary, in order to prepare for the rainy days.
Last month, I traveled back to Asia and took a short trip to one coastal city in China, and had some talks with the locals, including two families who are solidly upper-middle class, and some poor locals and migrants waiting for treatments in a hospital. Those poor are still living their bare-bone lives, while the upper-middle class families are driving new car models.
A couple of observations and tidbits I take away from that trip:
(1) One time, when we were driving to a nice local restaurant for dinner, I was marveled by how many new cars there are on the road. I learnt that cars are not cheap to the locals, but I was told that people (average joes) can get interest-free car loans for three years, no doubt funded (directly or indirectly) by the central government's stimulus package. That essentially means giving cars away to anyone who cares to get a license. No wonder car sales shoot through the roof. The question though becomes, how sustainable this kind of car sales is.
(2) The class concept of locals versus migrants is very real. Migrants drive the mopets; while banks would grant car loans to any locals who apply. Hence, almost all locals drive new cars. There is no collective wealth. If the banks are not lending, hardly anyone would be driving. Amidst news that export is picking up, or that local market in China has been stepping into the void created by the plummeting exports, everything's hinged on the policy in central government. When the central government says yes, there'll be easy credits (easier than those subprime loans in US); when the direction reverses, the banks can repro the cars. My other question is, what would happen to the local/consumer market in China when the easy credits from central government are gone. Naturally, we have one (and very similar) scenario playing out in US and Europe. Would that happen to China in 2010 or '11?
Right now, all eyes are on China. Afterall, there's not much good news to speak of in US and Europe. It's only natural that investors and companies want to chase anything that still has a growth curve. I hope the landing in China will be soft, because if that dragon catches flu, there'll be alot of countries catching aching bones and chills.
The sheer size of that market (by headcount) is enough to turn any heads. There's this popular metaphor that was used to describe the potential significance of the market in China: If you're a sock company, and imagine every one of the consumers in China would buy just one pair of socks from you. Even if you charge really, really low price for the socks, the absolute dollar value of the sales could still blow you away.
In a country like China, when its denizens are so lack of alot of material goods that have long been taken for granted in the western world, the collective rising wealth would certainly mean much sales in alot of different categories, from the basic daily necessities, to the luxury items.
But I have always had some lingering doubts at the back of my mind. For, in a country where a large majority of its citizens are still rural and living below poverty line, how much can they afford to buy is still a question that I haven't seen the answers on, from all the rosy analyst's and news reports. There is also this question of how "collective" the rising wealth is. Surely, most Chinese are avid savers, given that social safety net is almost non-existent, it's prudent to save more than necessary, in order to prepare for the rainy days.
Last month, I traveled back to Asia and took a short trip to one coastal city in China, and had some talks with the locals, including two families who are solidly upper-middle class, and some poor locals and migrants waiting for treatments in a hospital. Those poor are still living their bare-bone lives, while the upper-middle class families are driving new car models.
A couple of observations and tidbits I take away from that trip:
(1) One time, when we were driving to a nice local restaurant for dinner, I was marveled by how many new cars there are on the road. I learnt that cars are not cheap to the locals, but I was told that people (average joes) can get interest-free car loans for three years, no doubt funded (directly or indirectly) by the central government's stimulus package. That essentially means giving cars away to anyone who cares to get a license. No wonder car sales shoot through the roof. The question though becomes, how sustainable this kind of car sales is.
(2) The class concept of locals versus migrants is very real. Migrants drive the mopets; while banks would grant car loans to any locals who apply. Hence, almost all locals drive new cars. There is no collective wealth. If the banks are not lending, hardly anyone would be driving. Amidst news that export is picking up, or that local market in China has been stepping into the void created by the plummeting exports, everything's hinged on the policy in central government. When the central government says yes, there'll be easy credits (easier than those subprime loans in US); when the direction reverses, the banks can repro the cars. My other question is, what would happen to the local/consumer market in China when the easy credits from central government are gone. Naturally, we have one (and very similar) scenario playing out in US and Europe. Would that happen to China in 2010 or '11?
Right now, all eyes are on China. Afterall, there's not much good news to speak of in US and Europe. It's only natural that investors and companies want to chase anything that still has a growth curve. I hope the landing in China will be soft, because if that dragon catches flu, there'll be alot of countries catching aching bones and chills.
Sunday, January 3, 2010
On Twitter, another hype
I couldn't help laughing out loud when I read the opinion piece on Twitter, BOFSDT (aka Boring Old Farts Suddenly Discover Technology). I couldn't agree with it more. For all the soundbites and hype over Twitter, a large majority of the tweets are less than junk. Should we call (or ping online) something on the phone, simply because we've got a new phone, but we really don't have anything to say? In a more rational world, we don't. With Twitter, suddenly the teens and young adults are doing just, which make the notion of BOFSDT so apt.
I have no doubt that there are important usages of it, eg. sending out amber alerts for missing kids, or security warnings from university to students. The identifying trait of these usages is that, they serve a useful purpose. I'm not one of those who talk, for the sake of talking. I wonder how long it'll take for these mindless young folks to learn that lesson, before Twitter fades back into the background.
I have no doubt that there are important usages of it, eg. sending out amber alerts for missing kids, or security warnings from university to students. The identifying trait of these usages is that, they serve a useful purpose. I'm not one of those who talk, for the sake of talking. I wonder how long it'll take for these mindless young folks to learn that lesson, before Twitter fades back into the background.
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