Archive for: Practices

EconTalk (at www.econtalk.org) is among the most popular and respected podcasts on the web.  Voted Best Podcast in the 2008 Weblog Awards, it is hosted by Russ Roberts, Professor of Economics and the J. Fish and Lillian F. Smith Distinguished Scholar at the Mercatus Center at George Mason University.

Posted weekly, the program usually features Roberts interviewing a distinguished economic thinker.  On February 8th, Roberts broke from this format to discuss his own thinking about why trade is good.  Drawing on Adam Smith and David Ricardo, 18th and 19th century respectively giants of economic thought, he explored how trade increases personal productivity by a factor of a hundred and more.  As he summed up, “Self-sufficiency [in a person, a tribe, or a country] equals poverty.” Read

When we think of exports, we tend to visualize container ships, trains or planes carrying large, heavy cargo. But former Federal Reserve economist W. Michael Cox tries to correct that impression in today’s New York Times (Feb. 17). While praising President Obama’s State of the Union speech call for the United States to “export more of our goods”, Cox says it would have been much better to have said “goods and services.” As Cox points out, the United States has a $144 billion surplus in services, including an 8-1 edge in operational leasing — handling short-term deals on planes, vehicles and other equipment — a 6-1 margin in movie and television program distribution, and a 4-1 advantage in architectural, construction and engineering services. In total, the United States is competitive in 21 of 22 services categories, with significant surpluses in 12 of them. Read

Have you seen those new Toyota ads?  The ones in which the company apologizes for letting quality slip.  These are very unusual for a corporation facing product liability suits — and they are exactly the right thing to do.

Typically companies in Toyota’s position, clam up.  Statements are defensive and evasive.  Maintaining such a posture during the long life of a litigation will leave a company’s reputation in badly compromise.

Yet public opinion studies have shown that companies that publicly speak to their problems — that defend themselves but also that acknowledge faults and both pledge and work to fix them — build the trust of potential jurors, not to mention customers and suppliers.

Toyota is right to put corporate reputation first, and is likely to do better in court as a result.

I’m a movie fan. I’m also an Oscar fan. One of the compensations for cold winters was always waiting with anticipation for the Oscar nominations to come out, when I could compare the various nominees, agree or disagree with the picks, and try to guess which nominated movies were in serious contention. This year’s nominations came out last week, and I still can’t name all of the nominees for best film. There are simply too many of them. Trying to recognize the achievments of more films, the Academy has doubled the number of Best Film nominees, from five to 10 — thereby diminshing the attention paid to each of them.

Who can focus on 10 movies? Who can take seriously that long a list of “excellence” in one year? And who can look forward to an Academy Awards show that will be even longer than usual? The Academy’s decision to double the number of Best Film nominees is a classic mistake in messaging — a failure to recognize that less is more.

What we have here, as Strother Martin might have pointed out in Cool Hand Luke, is a failure to communicate.

Kraft’s four-month battle for control of Cadbury was one of the leading Transatlantic business news stories of 2009. It was fiecely fought. It may be no coincidence that it was a battle of jock CEOs. In one corner was Kraft CEO Irene Rosenfeld, a former varsity star of four high school sports who decided to attend Cornell partly because of their athletic program. In the other corner was Cadbury CEO Todd Stitzer, a former professional tennis player.

It may be that the competitive spirit one learns on in competitive sports translates into a significant advantage in business. Neither CEO gave up easily: Rosenfeld has turned Kraft into the world’s biggest confectionary company, replacing Mars. Stitzer managed to get for his shareholders a 50 percent increase over Kraft’s original offer last September.

Sometimes it’s not what you say, but who says it that matters.

At least that was the case in 1957 – two weeks after the Little Rock Nine were barred from Central High School – when Louis Armstrong gave one of his most notable performances.  But this wasn’t a musical riff.

According to a recent interview on National Public Radio, Larry Lubenow, a journalism student working at The Grand Forks Herald in Little Rock, AK, was sent to interview Armstrong about a concert.  Instead he got an (obscene) earful about politics and race relations that ultimately caught the attention of President Eisenhower. Read

We often see clients who ask us to defend them against studies that make unsupported connections between their products and  health or environmental claims.

Alex Lundry of TargetPointConsulting shows how scientific-looking charts can suggest outcomes that are nonsensical.  For example, the universe of data you select is critical.  (One of his charts shows that President Obama, when compared to every president going back to McKinley, is the all-time “pirate killer.”  His record is sadly diminished, however, when you go back to Jefferson and Madison.) Read

In the current economic environment it takes some courage to talk about a forthcoming, prolonged boom in the global economy. But Gregg Easterbrook (author of The Progress Paradox) has never been known for repeating concentional wisdom. His latest book — Sonic Boom: Globalization at Mach Speed — can serve as a primer on how to describe global economic change (and its likely intensification) in a way that a broad-based audience can relate to. He acknowledges that there is a paradox at the heart of globalization — more economic growth and opportunity, more stress and insecurity. And he describes both sides of the global economy coin, using both economic data and stories about communities.

This is not just a book about how Shenzhen is thriving. It is also about how Waltham, MA and Camden, S.C. are bouncing back. And it is about the fact that all communities will have to continually reinvent themselves to compete in the heightened, prolonged era of globalzation the author argues is coming. For anyone looking for a deep intellectual explanation of globalization, there might be more apporpriate books to recommend. But Sonic Boom is a valuable resource for anyone whose job includes explaining global economic change.

With the holiday party season in full swing, bankers across America are faced with a dilemma: Do I tell people what I do for a living?

Bankers today fall just below lawyers and persnickety salespeople in the public’s esteem. Even President Obama pulled out the old pejorative “fat cats” to describe Wall Street types – and remind the public that these portly felines were at the root of the financial crisis we’ve endured.

Bankers aren’t used to this kind of scrutiny. No longer answerable only to shareholders or directors, bank leaders now have to consider how their institutions are being viewed in Washington and in communities across America.

So how can bankers burnish their image at a time like this? Here are three ideas: Read