Blakes Think Tank

Executive pay becomes political

Companies facing financial hardship and that seek to pass off that cost to the consumer are seeing greater public scrutiny for the money they pay their executives. For example, energy companies who provide energy to Illinois - the Ameren Corporation and the Exelon Corporation - have been subject to a rate freeze in 1997. The freeze is set to end in 2007, but members of both political parties got involved because once the freeze ends, company executives stand to enjoy stock option gains simply because consumers are paying more for electricity.

Many argue that energy companies like Ameren, who’s shareholders approved a new a considerably more generous stock incentive plan for its top executives and high level managers, sought to engineer a windfall as a result of anticipated rate increases.

New bird flu strain emerges

Scientists have discovered a new strain of bird flu that appears to sidestep current vaccines. The new variant has become the primary version of the bird flu in several provinces of China and spread to Hong Kong, Malaysia and Thailand. It is being called H5N1 Fujian-like, to distinguish it from earlier Hong Kong and Vietnam variants. The H5N1 flu has devastated poultry in China and several other Southeast Asian countries.

Stadium living: the future of real estate?

Whether you live in a college town or a professional sports town, real estate developers are targeting football-crazy clients with high-end condominiums. In Baton Rouge, Louisiana, home of the LSU Tigers, developers are constructing condos with a price tag of around $200,000 for a two-bedroom unit within walking distance of Tiger stadium. Developers including Gameday Centers Southeastern LLC are working to market condos near the University of Notre Dame and the University of Tennessee. Universities are benefiting from this as well. For example, the University of Georgia in Athens has taken in about $275,000 from sales of a condo complex that opened two years ago a few blocks from Sanford Stadium where the Bulldogs play football. By lending its name to a development, school teams get part of the purchase price, usually 1%.

In cities home to professional sports teams, developers are working in tandem with cities to build comprehensive neighborhoods which encompass the stadium. Victory Park in Dallas is being developed around the American Airlines Center which is home to the NBA franchise Dallas Mavericks. Similar mega developments are in the works: Westgate City Center in Phoenix, Arizona with the Glendale Arena and the home of the Arizona Cardinals across the street; Ballpark Village in St. Louis, Missouri, a $650 million urban neighborhood spanning six blocks next to the new Busch Stadium; Glorypark in Arlington, Texas, an urban village between Ameriquest Field and the future home of the Dallas Cowboys.

Mixing office politics with real politics

Once frowned upon, companies like Google are working on efforts to foster more discussion about political matters. In an effort to foster “as open an environment as possible,” because collaboration and conversation are integral to its corporate culture, Google is encouraging its employees to have political conversations and considers it “part of your responsibility as a member of a democracy.” Google considers it “a positive thing to have” according Laszlo Brock, who oversees Google’s human resources department as vice president for people operations. “The conversations are useful and productive, and people learn from them,” quotes the Wall Street Journal. “I truly believe it is part of what makes democracy work.”

While Google doesn’t advocate a particular political viewpoint, other companies such as Outten & Golden, an employment law firm in Manhattan, gave employees a week of paid leave to work on the 2004 presidential campaign. Said the firm’s managing partner Wayne Otten, “Part of having a lot of smart and interested people working together is the opportunity to discuss current events and things of interest, and we try to have a workplace that represents all of those things.”

Diversity recruitment: wanting the same opportunities

According to David Lange, director of TMC, a global diversity and cross cultural consultancy based in Princeton, New Jersey, new diverse hires don’t want special advantages. “What they want is the same opportunities, and access to those informal networks that can help them get ahead.” Research has shown that employees, regardless of background, gender and ethnicity, want three things from their employers: “To be treated equally, to have a sense of achievement, and to have a sense of belonging through work relationships and friendships,” according to Douglas Klein, president of the Sirota Survey Intelligence, a research consultancy based in New York.

Companies like Starbucks are revamping their management training so that it includes diversity and inclusion material and case studies.

The high cost of textbooks

Last month, a Congressional advisory committee held a public hearing to design a study that will offer recommendations on what the federal government, states and individual institutions can do to reign in the cost of college textbooks. A number of states, including Connecticut, Virginia and Washington, recently passed laws that aim to make the professors who assign more books more cost conscious or that cut back on the need to buy big packages of materials that may not all be used in class. In all, some 18 states this year saw legislation introduced that dealt with textbook costs, according to the National Association of College Strores.

Time off, it’s required

Yahoo Inc. will require its workers to take vacation or unpaid time off the week between Christmas and New Year’s. While this may be a revenue-based decision, Yahoo executives say “this will allow many employees to enjoy guilt-free time off while helping Yahoo reduce unused vacation time.”

Women in management

Female training programs, like the two-week seminar offered by Smith College, are growing in corporate America. The programs have become popular in addressing the scarcity of female executives. The programs, solely for women, are also available at Babson College in Wellesley, Mass. and Simmons College in Boston. Participants come from many of the leading companies including: Johnson & Johnson, Deloitte & Touche and Time Warner, Inc.

Advocates say the women-only programs allow participants to discuss leadership challenges that men may neither perceive nor understand. Programs also allow women to trade strategies on balancing work with family commitments, which are often more acute for women than for men according to Erin White of the Wall Street Journal.

Women now occupy slightly more than half of U.S. managerial and professional jobs, but progress at the very top remains glacial. Last year, women held 16.4% of Fortune 500 corporate-officer posts, according to Catalyst, a New York research group.

Corporate reputation takes 3.2 years to recover from a crisis

Executives from around the world believe it takes companies slightly more than three years (3.2 years) to recover from a crisis that damages their reputation, according to market research by Burson-Marsteller. According to the study, the top 10 crisis management turnaround strategies are:

  1. Quickly disclose details of scandal/misstep
  2. Make progress/recovery visible
  3. Analyze what went wrong
  4. Improve governance structure
  5. Make CEO and leadership accessible to the media
  6. Fire employees involved with the problem
  7. Commit to high corporate citizenship standards
  8. Carefully review ethics policies
  9. Hire an outside auditor for internal audits
  10. Issue an apology from the CEO

What’s with the color in your wardrobe?

Color can play a critical role in setting the tone for your public appearance. Just ask White House press secretary Tony Snow who has been seen in an array of colored shirts depending on the occasion. For example, the Wall Street Journal notes that when President Bush gave an upbeat press conference in the Rose Garden, Mr. Snow wore a pink shirt and a light blue tie.

On the other hand, while discussion a very serious matter related to Syria, Mr. Snow wore a white shirt and a maroon tie.

Hey kids! Don’t follow your parents.

The Wall Street Journal finds that fewer parents are encouraging their kids to follow in their career footsteps.  Some parents aren’t eager to have their kids grow up to be like them.  For example, nearly three fourths of all physicians are lesst willing than in the past to encourage their children to follow in their footsteps says a 2005 survey of 736 doctors.  More parents are seeing the toll that their respective professional careers have taken on their families and encourage their children to find more balance.

Global warming, recycling and the economy

Apple Computer, Inc. and Dell Inc. recently announced efforts to reduce the use of environmentally unfriendly substances contained in their products and to boost recycling of used machines.  In the PC industry, manufacturers have come under fire for their role in the fast-growing problem of electronic waste around the world.  Critics have faulted PC makers for their use of polyvinyl chloride and certain flame retardants that are considered potentially harmful to the environment.

To combat the campaign against computer manufacturers, Dell dropped a fee requirement for recycling customers’ computers and agreed to take back an old Dell PC model with the purchase of a new model.  In June, however, Michael Dell announced what some environmentalists call the most aggressive recycling commitment in the industry: an agreement to take back any Dell computer free, even without a new purchase.  The program is now in effect world-wide.

Betting on biodiesel

Brazil, already the world’s leader in energy efficiency, is getting into the biodiesel game.  Already the world’s largest producer of ethanol, Brazil is looking towards biodeisel as a way to help small farmers.  Brazil’s state owned petroleum giant, Petrobas, is already selling a fuel blend with 2& biodiesel at hundreds of retail gas stations.  The company is investing in manufacturing facilities.  It is also patenting a fuel known as H-Bio that it says will save millions of barrels of oil by using vegetable oil the refining process to create a low-polluting petroleum diesel.

No country has been more successful at displacing fossil fuels with green energy than Brazil.  Hammered by the oil shocks of the 1970s, Brazil committed itself to developing an ethanol industry to reduce its dependence on imported petroleum.

Today, 40% of the fuel that powers passenger cars in Brazil is made from homegrown sugar cane.  By promoting a cleaner-burning alternative made from Brazilian-grown castor beans, soybeans, palm oil and other crops, the government hopes to slash diesel imports and improve air quality in its cities, as well as generate rural income and employment.

The end of early admissions?

First Harvard, now Princeton.  These two elite Ivy League insitutions have done away with early admission.  The reason: it was found that there were too many obstacles for low-income applicants and a need to drive up selectivity to appeal to the U.S. News and World Report annual rankings of the Best Colleges and Universities.

Philanthropy all around us

Google recently committed $1 billion to a for-profit philanthropic operation that will do everything from back start up companies to lobby legislatures.  Among its first projects: helping to build a superefficient ethanol - gasoline - electric car engine.

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© 2008 Blake Rutherford. All rights reserved.