I guess I am a negatron but that is by design. I have a fairly structured decision making process borne of years in the military where decision making at the lowest levels is encouraged to be free thinking (within the regulations of course). Many people think groupthink is alive and well in the US Military and to some extent, it is especially at the general officer ranks. Nevertheless, groupthink in the military, the government and business leads to undesirable outcomes across the board.
Individuals like Gen McChrystal or Carly Fiorina at HP do not adhere to groupthink. Unfortunately, these individuals are drummed out of an organization. Groupthink fails because equal credence is given to all ideas regardless of form and validity, not a bad concept with a strong capable leader able to ferret out the BS. However, without good leadership the common denominator of these decisions is mediocrity not excellence. When management cannot make a decision and allows the groupthink mentality to flourish failure will ultimately occur. I agree that groupthink in and of itself can be useful and lead to better acceptance of good practice and procedures, but it is better defined and characterized as consensus building whereby all ideas are aired and discussed. But decisions based upon how well they will sell with the company masses only perpetuates low standards and drives folks with higher goals and standards to other venues for work leaving the organization with those that accept mediocrity as the standard.
Tuesday, August 17, 2010
Tuesday, July 27, 2010
The Fall of The BP Executive
Well the fall of Tony Hayward of BP is complete. However, did he deserve the punishment meted out to him? His use of the English language notwithstanding ("I just want my life back” which I can understand was spoken in an unguarded moment) and his choice of activities in which to relax (yachting) certainly cast a pall over his departure. However, by all accounts BP did as much as could be expected after the oil incident occurred and we may never know what happened on the Deepwater Horizon oilrig.
So..should he be the scapegoat for the misadventures of BP in the Gulf of Mexico?
It is important and we all forget from time to time that leadership is about getting the best out of people even when they don't to do the things an organization needs to do...and get them to do it because they want and need to do it not because you told them to.
Part of this is taking the hit when it comes (and it will come). I have always believed and acted upon this belief: I am responsible for everything my organization does or does not do. If we succeed, it is because, as a team, we all contributed and the team deserves the credit. If the team fails, then I have failed and should take the first bullet from the corporate gun. Others may fall and should but if they have done my bidding in good faith then I may be the only one to pay the price.
I do not begrudge Mr. Hayward's payment as he departs since 90% was earned through his pension over 28 years in the making. Nevertheless, like everything from the yacht to getting his life back, in total it looks bad.
So..should he be the scapegoat for the misadventures of BP in the Gulf of Mexico?
It is important and we all forget from time to time that leadership is about getting the best out of people even when they don't to do the things an organization needs to do...and get them to do it because they want and need to do it not because you told them to.
Part of this is taking the hit when it comes (and it will come). I have always believed and acted upon this belief: I am responsible for everything my organization does or does not do. If we succeed, it is because, as a team, we all contributed and the team deserves the credit. If the team fails, then I have failed and should take the first bullet from the corporate gun. Others may fall and should but if they have done my bidding in good faith then I may be the only one to pay the price.
I do not begrudge Mr. Hayward's payment as he departs since 90% was earned through his pension over 28 years in the making. Nevertheless, like everything from the yacht to getting his life back, in total it looks bad.
Thursday, July 22, 2010
Financial Advice to Women - Part Two How to Rebuild Credit Rating
As in Part One, this section is about modifying our behavior when it comes to money and understanding how the system works. We must understand that in most cases poor credit resulted in a pattern of spending over a period and as such will probably take as long if not longer to rectify.
Individuals face two common problems: Poor credit rating and no credit rating. Both have their unique issues and solutions. We will start with poor credit rating.
Poor credit ratings can be a result of a myriad if issues most likely from poor spending habits resulting in debt accumulation and failure to pay debts for what ever reason. There are other issues (bankruptcy, payment delinquency, default on loans, etc.) but they are beyond the scope of today’s blog.
Poor spending habits lead to the problems but poor decisions in solving credit dilemmas exacerbate the issues. Many people ignore obligations taking a manageable situation and making it a chaotic condition. Of course we all are going to face extraordinary circumstances in our lives that we cannot plan for (job loss, serious illness, etc.) that may well create a condition where credit rating fall. It is how we deal with these that defines our credit character.
Another problem that many women face is that of no credit rating. A woman is most frequently linked to her spouse/partner’s credit rating and does not have one of her own. Some women (and men) do not have a credit rating because they are new to the workforce or have never used credit out of fear of the system or no need. In many circumstances financial planning has driven couples into situations where both incomes are so linked that neither one of the individuals in a marriage have a clear independent credit rating. Usually the individual with primacy on the account in terms of income and naming have the rating while the other individual lacks a rating if separated from the arrangement through death or divorce.
How can an individual rectify these two problems? In the case of a poor credit rating, get informed – what does a poor credit rating mean to you. You may still be able to get credit but you may have to pay a higher interest rate or more stringent repayment terms. Your debtors wan to work with you - they want you pay off the debt rather you file for bankruptcy. Talk to them before you cross the Rubicon of Bankruptcy.
A first step in fixing a credit rating is to determine how bad it really is. To do so get a copy of your credit report and check the details of what is on the report. You do not want to be surprised. Sources of credit ratings are typically Equifax, Experian, and Transunion. You can get a copy through your bank or buy contacting them directly for a one-time fee. Be cautious that you do not signup for services beyond your needs (credit monitoring, identity theft protection, etc.). Steps to take in the short term to repair credit ratings/ranking s include:
a. Control spending.
b. Pay down debt beyond the minimum payments.
c. Pay bills (all bills) on time.
d. Do not miss payments even if the payments are small
e. Negotiate directly with the debtor for a payment plan. In many cases, they will work with you and will not report the negotiation to the credit bureaus. Other “credit counseling and debt consolidation services will report the activity and the credit rating could suffer even more despite good intentions.
f. Avoid opening new credit cards and rolling over to a lower interest rate that goes up later. This activity can adversely affect your rating instead of helping.
g. As a last resort, use a debt consolidation service. The use of these services can prolong the recovery process since it is sometimes reported to the credit bureaus.
h. Continue to create a savings culture in your life
Many young women (and men) do not have a credit rating since they are new to the work force after any years due to divorce or they are new due to recent college graduation. There is no quick way to build a credit rating but small actions quickly build up a positive rating. You ca first establish credit accounts where you can control what you purchase and monitor. Pay these off each month. This payment schedule has a positive impact on your rating history.
You can purchase a large ticket item (if you need it; not for just building a credit rating) such as household appliance, car (used or old) or furniture. This installment consumer credit is usually unsecured (other than the item being purchased and reflects directly o your “credit worthiness”. When buying a car most people want it to be owned jointly and this is okay but you are not building an independent credit rating, hence the problem if divorce or death occurs. A parent may purchase a car for a child graduating from college but it does nothing for the credit rating. Better to help a child in other ways and let her/him finance the car when thy have a job upon graduation.
If you are married with a job, you can put back money in a separate savings account do this as it is a factor when getting loans independent of your spouse/partner or you are single. Getting credit cards as a separate cardholder also helps build the credit record.
These are just a few of the ideas for building, repairing and restoring your credit worthiness in these and subsequent time. As always, see a licensed financial advisor for detailed planning when you can but remember Rome was not built in a day so time is needed as well as a disciplined approach. Your credit rating is as important as your identity so protect it.
Individuals face two common problems: Poor credit rating and no credit rating. Both have their unique issues and solutions. We will start with poor credit rating.
Poor credit ratings can be a result of a myriad if issues most likely from poor spending habits resulting in debt accumulation and failure to pay debts for what ever reason. There are other issues (bankruptcy, payment delinquency, default on loans, etc.) but they are beyond the scope of today’s blog.
Poor spending habits lead to the problems but poor decisions in solving credit dilemmas exacerbate the issues. Many people ignore obligations taking a manageable situation and making it a chaotic condition. Of course we all are going to face extraordinary circumstances in our lives that we cannot plan for (job loss, serious illness, etc.) that may well create a condition where credit rating fall. It is how we deal with these that defines our credit character.
Another problem that many women face is that of no credit rating. A woman is most frequently linked to her spouse/partner’s credit rating and does not have one of her own. Some women (and men) do not have a credit rating because they are new to the workforce or have never used credit out of fear of the system or no need. In many circumstances financial planning has driven couples into situations where both incomes are so linked that neither one of the individuals in a marriage have a clear independent credit rating. Usually the individual with primacy on the account in terms of income and naming have the rating while the other individual lacks a rating if separated from the arrangement through death or divorce.
How can an individual rectify these two problems? In the case of a poor credit rating, get informed – what does a poor credit rating mean to you. You may still be able to get credit but you may have to pay a higher interest rate or more stringent repayment terms. Your debtors wan to work with you - they want you pay off the debt rather you file for bankruptcy. Talk to them before you cross the Rubicon of Bankruptcy.
A first step in fixing a credit rating is to determine how bad it really is. To do so get a copy of your credit report and check the details of what is on the report. You do not want to be surprised. Sources of credit ratings are typically Equifax, Experian, and Transunion. You can get a copy through your bank or buy contacting them directly for a one-time fee. Be cautious that you do not signup for services beyond your needs (credit monitoring, identity theft protection, etc.). Steps to take in the short term to repair credit ratings/ranking s include:
a. Control spending.
b. Pay down debt beyond the minimum payments.
c. Pay bills (all bills) on time.
d. Do not miss payments even if the payments are small
e. Negotiate directly with the debtor for a payment plan. In many cases, they will work with you and will not report the negotiation to the credit bureaus. Other “credit counseling and debt consolidation services will report the activity and the credit rating could suffer even more despite good intentions.
f. Avoid opening new credit cards and rolling over to a lower interest rate that goes up later. This activity can adversely affect your rating instead of helping.
g. As a last resort, use a debt consolidation service. The use of these services can prolong the recovery process since it is sometimes reported to the credit bureaus.
h. Continue to create a savings culture in your life
Many young women (and men) do not have a credit rating since they are new to the work force after any years due to divorce or they are new due to recent college graduation. There is no quick way to build a credit rating but small actions quickly build up a positive rating. You ca first establish credit accounts where you can control what you purchase and monitor. Pay these off each month. This payment schedule has a positive impact on your rating history.
You can purchase a large ticket item (if you need it; not for just building a credit rating) such as household appliance, car (used or old) or furniture. This installment consumer credit is usually unsecured (other than the item being purchased and reflects directly o your “credit worthiness”. When buying a car most people want it to be owned jointly and this is okay but you are not building an independent credit rating, hence the problem if divorce or death occurs. A parent may purchase a car for a child graduating from college but it does nothing for the credit rating. Better to help a child in other ways and let her/him finance the car when thy have a job upon graduation.
If you are married with a job, you can put back money in a separate savings account do this as it is a factor when getting loans independent of your spouse/partner or you are single. Getting credit cards as a separate cardholder also helps build the credit record.
These are just a few of the ideas for building, repairing and restoring your credit worthiness in these and subsequent time. As always, see a licensed financial advisor for detailed planning when you can but remember Rome was not built in a day so time is needed as well as a disciplined approach. Your credit rating is as important as your identity so protect it.
Financial Advice to Women - Part One Get Control of the Money
Economic times are often described as a recession or depression. In personal terms, it is a recession where your neighbor is out of work. However, it is a depression when you lose your job. This is a particularly difficult time for single women with little experience in the financial world. Here are some ideas on how women can improve their financial situation (credit scores) after they have encountered problems with debt after a job loss and are returning to the work force.
The first thing to remember is that these problems did not happen in one big fell swoop unless there was a cataclysmic event (death or serious illness in the family) so the remedy will take longer than expected; much longer, and will require significant effort in terms of mental attitude, lifestyle adjustment, and habit modification. The mental attitude is probably the most difficult since the task can be very daunting and discouraging. The sheer scope of the problem will vary from individual to individual but the plight of a single woman (mother) is one highlighted each night on the evening news and can lead one to believe there is no use in trying. Hence, the resulting downward spiral into financial chaos.
I cannot solve all the problems here in this piece and some individuals reading this have taken the first step in solving their issues simply by reading this blog. The first steps to fixing a problem is identifying the problem then seeking information (help).
You are already in trouble so First things first: Gain control of spending NOW.
Four Ways to Trim Spending
We need to understand where the spending is occurring. It is a cliché’ to say create a budget. However, one must know where the money is coming from and where it is going I order to gain control of the financial situation. Most of us pay the important bills first unless we are facing a real financial predicament (unemployment, severe illness, etc.). The remaining spending gets us in trouble. Pay yourself first is always a good idea. I do not mean to spend money on your self. You need to build up reserves that you depleted during the emergency otherwise, you will be in worse shape when it happens again (we can hope and pray that it does not but Chance favors only the prepared mind.” - Louis Pasteur). The areas needing attention when building reserves include:
a. Current savings
b. Retirement
The amount put aside does not need to be a substantial amount at first but it is important to make it a habit.
In spending, we all need to determine why you are buying what you are buying. Spending money can be a great deal like comfort food. We eat not because we are hungry but because it makes us feel good. Nutrition is second. As a result, we gain weight, then we feel bad and the cycle begins again. Spending money follows the same cycle for many people, especially in the United States. However, do not say to yourself "I am not going to spend money unless I need to" – this will build a legacy of guilt, which can be counterproductive.
First, look at where you are and then determine where you want to be in three to five years in terms of savings. You notice I did not mention goals; these are like New Year’s resolutions – meant to be broken. Habits take time and prioritization. What are these goals?
a. Savings.
b. Primary home.
c. Retirement.
d. Education for children.
e. Rainy day fund.
f. Vacation home.
The clarity you receive from this analysis will aid you as you build the financial escape from chaos plan.
The next step is to prioritize spending. You notice I have not told you what NOT to buy. Prioritization does two things: It points you in the right direction to avoid short-term issues (foreclosure, pay garnishment, etc) and gives you rational reasons for not spending money you do not have (debt accumulation). Remember to pay yourself first in terms of savings.
a. Mortgage/Rent
b. Utilities
c. Food – Big area where savings can occur
d. Insurance
e. Education (children or self)
f. Clothing – another big area that needs prioritizing within the category
i. Business/work clothing
ii. Casual/entertainment clothing
iii. Other clothing
g. Other bill paying
h. Actual discretionary spending
i. Entertainment
ii. Dining
iii. Travel
Take small steps along the way – a staircase is a series of steps not one large step.
The first thing to remember is that these problems did not happen in one big fell swoop unless there was a cataclysmic event (death or serious illness in the family) so the remedy will take longer than expected; much longer, and will require significant effort in terms of mental attitude, lifestyle adjustment, and habit modification. The mental attitude is probably the most difficult since the task can be very daunting and discouraging. The sheer scope of the problem will vary from individual to individual but the plight of a single woman (mother) is one highlighted each night on the evening news and can lead one to believe there is no use in trying. Hence, the resulting downward spiral into financial chaos.
I cannot solve all the problems here in this piece and some individuals reading this have taken the first step in solving their issues simply by reading this blog. The first steps to fixing a problem is identifying the problem then seeking information (help).
You are already in trouble so First things first: Gain control of spending NOW.
Four Ways to Trim Spending
We need to understand where the spending is occurring. It is a cliché’ to say create a budget. However, one must know where the money is coming from and where it is going I order to gain control of the financial situation. Most of us pay the important bills first unless we are facing a real financial predicament (unemployment, severe illness, etc.). The remaining spending gets us in trouble. Pay yourself first is always a good idea. I do not mean to spend money on your self. You need to build up reserves that you depleted during the emergency otherwise, you will be in worse shape when it happens again (we can hope and pray that it does not but Chance favors only the prepared mind.” - Louis Pasteur). The areas needing attention when building reserves include:
a. Current savings
b. Retirement
The amount put aside does not need to be a substantial amount at first but it is important to make it a habit.
In spending, we all need to determine why you are buying what you are buying. Spending money can be a great deal like comfort food. We eat not because we are hungry but because it makes us feel good. Nutrition is second. As a result, we gain weight, then we feel bad and the cycle begins again. Spending money follows the same cycle for many people, especially in the United States. However, do not say to yourself "I am not going to spend money unless I need to" – this will build a legacy of guilt, which can be counterproductive.
First, look at where you are and then determine where you want to be in three to five years in terms of savings. You notice I did not mention goals; these are like New Year’s resolutions – meant to be broken. Habits take time and prioritization. What are these goals?
a. Savings.
b. Primary home.
c. Retirement.
d. Education for children.
e. Rainy day fund.
f. Vacation home.
The clarity you receive from this analysis will aid you as you build the financial escape from chaos plan.
The next step is to prioritize spending. You notice I have not told you what NOT to buy. Prioritization does two things: It points you in the right direction to avoid short-term issues (foreclosure, pay garnishment, etc) and gives you rational reasons for not spending money you do not have (debt accumulation). Remember to pay yourself first in terms of savings.
a. Mortgage/Rent
b. Utilities
c. Food – Big area where savings can occur
d. Insurance
e. Education (children or self)
f. Clothing – another big area that needs prioritizing within the category
i. Business/work clothing
ii. Casual/entertainment clothing
iii. Other clothing
g. Other bill paying
h. Actual discretionary spending
i. Entertainment
ii. Dining
iii. Travel
Take small steps along the way – a staircase is a series of steps not one large step.
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