Geoff Colvin's Blog, page 11

My own private Goldman testimony

In a historic market dislocation, there were -- guess what -- winners and losers. Last time I checked, that was not a crime or even a scandal. It's the way economies work.(Fortune) -- I was not asked to testify at the recent hearings of the Senate Permanent Subcommittee on Investigations, probably because I've never worked at Goldman Sachs or anywhere else on Wall Street, or had any involvement whatsoever in the market for synthetic CDOs, all-natural CDOs, or subprime mortgages of any kind. N...

The real outrage is how CEOs are paid, not how much

If you want to get mad at companies for screwing up executive pay, here are three good reasons.(Fortune) -- It's outrage season, formerly known as proxy season, when recession-shocked Americans get furious at the new list of insanely overpaid CEOs. The leader so far is Occidental Petroleum chief Ray Irani ($59 million), an excessive-pay hall-of-famer, but he may be overtaken by others as more proxies are filed. The bad-boy headlines will misleadingly suggest that CEO pay levels overall are a ...

Stop blaming Big Business

Punishing Wall Street for the recession won't solve the real problem - that most Americans still won't be better off.(Fortune Magazine) -- The top-grossing movie in the world, Avatar, is on screens now, and it clearly identifies the most evil force in the universe. It's business. "There's only one thing the shareholders hate more than bad publicity," says the smarmy manager of an unnamed company's mining operations on the planet Pandora in Avatar, "and that's a bad quarterly report." Slaughte...

A new financial checkup

In business as in life, be careful what you wish for.(Fortune Magazine) -- In business as in life, be careful what you wish for. I know a company that wished for a better return on equity. What could be wrong with that? It paid its executives according to that measure, and man, did they deliver. In some years the firm had the best ROE in its industry. It was winning bigtime. The firm was Lehman Brothers, now dead because managing for ROE caused executives to overborrow; after all, debt is c...

Leading during a downturn

Leadership problems come up again and again in a downturn. Solving them doesn't take fancy technology - just character and courage.(Fortune Magazine) -- Businesspeople love to tell me their problems, and in the waning days of this recession they keep describing three of them more than any others. They have to do with vanishing leadership, changing corporate culture, and talent. They're problems that grow particularly acute in a downturn -- which means every company needs to worry about them. ...

Fewer deaths during a recession

The death rate went down as unemployment rose - a lesson for companies: overworked employees can be bad for business.(Fortune Magazine) -- Profits are down at Hillenbrand, America's largest maker of caskets. Admittedly, this fact sounds like the setup for a punch line, but the cause of the shortage in stiffs contains lessons for politicians and business leaders alike. Hillenbrand's CEO, Kenneth Camp, explained his company's main problem this way in a recent conference call with analysts: "Con...

Stay lean and mean even after the recession

It's critical to stay lean and mean during an economic recovery - and even expansion - so you're ready for the next disaster.(Fortune Magazine) -- If ever you were entitled to start breathing easier, now would seem to be the moment. So why am I telling you not to? The end of the recession seems so close that you can almost smell it. The stock market is surging, China and India are firing on all cylinders again, and no one would be surprised if in the next quarter the U.S. economy shows signs ...

Renovating Home Depot - ( Aug. 18, 2009 )

That's part of CFO Carol Tomé's job, and after the housing bust it's tougher than most - but the lessons are valuable for anyone.(Fortune Magazine)—Think the recession has been tough on you? If you're in the housing sector, like Home Depot, this is the downturn's fourth year. The company's revenues are down, and the stock has dropped 36% over that period—but revenues have held up at its rising competitor, Lowe's (LOW, Fortune 500), and its stock hasn't suffered as much. All of which makes li...

Renovating Home Depot

That's part of CFO Carol Tomé's job, and after the housing bust it's tougher than most - but the lessons are valuable for anyone.(Fortune Magazine) -- Think the recession has been tough on you? If you're in the housing sector, like Home Depot, this is the downturn's fourth year. The company's revenues are down, and the stock has dropped 36% over that period -- but revenues have held up at its rising competitor, Lowe's (LOW, Fortune 500), and its stock hasn't suffered as much. All of which ma...

3 Big Myths about health-care reform - ( Aug. 11, 2009 )

With historic legislation on the line, the spin is coming from all sides. Here's how to sort through it.(Fortune Magazine)—One of Washington's true epic battles will play out over the next several weeks. It's the fight over health-care reform, of course, and it will be big, brutal, and ugly. The stakes are high—trillions of dollars, the reelection prospects of hundreds of legislators, and President Obama's legacy. So let's acknowledge right now that nobody will be fighting fair. We will hear ...