| Due to technical
problems the August issue of the Exec Report was
delayed. We apologize for this
inconvenience. |
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Re-engineering is a
normal and ongoing business activity. It consists
of implementing improvements in the business
activities to yield greater sales and better
margins. But re-engineering generally addresses
changes within the existing business model. As a
business matures it is frequently seduced by the
sirens of its future demise; size, age and
success. Management believes it is doing the right
things and is deaf to challenges to those beliefs.
At this stage the mature organization doesn’t
realize that without reinvention its
transformation will be from success to failure. A
major factor that plays into this ‘doing business
as usual’ is the emphasis on current performance
and short-term shareholder value. This short view
of the business inhibits the kind of thinking that
is necessary to reinvent the organization
including building a new mental model and changing
the approach to customers, suppliers, employees
and work habits. For an excellent discussion of
the mature organization and the need for
reinvention from Knowledge@Wharton
click MORE
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Are you frustrated that
the price of your stock seems to be irrationally
lower than your appraisal of value? You and
everyone else about now . . . It certainly isn’t
news that the market doesn’t always agree with the
fundamentals in the short run because of investor
behavioral bias with respect to inflation,
interest rates, and earnings projections. This
disparity can and does have a negative impact on
corporate strategy as management tries to sustain
shareholder value during these irrational
short-term periods rather than sticking to the
long-term fundamental drivers. McKinsey Quarterly
attempts to explain these factors and proposes a
model that will factor out the short-term investor
bias giving a clearer picture of the underlying
real share price to guide management – and
possibly you. MORE
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It’s sure going to be
interesting when the new
SEC reporting requirements take effect for
fiscal years ending on or after December 15. The
dust from Sarbanes-Oxley (SOX) has hardly settled
and now Corporate America has another hurdle. They
must now report total compensation of CEO’s and
other highly-paid executives right there for all
to see. This is almost guaranteed to create a
barrage of talking heads and articles discussing
what will be played as wild excesses. Yes, that
$700,000 ‘supplemental
relocation allowance’ that protects the price
of a home upon sale in this down market will be
added to the compensation package of that new hire
along with buy-outs of prior equity from his or
her former employment. The numbers are going to
look big and it will surely attract politicians to
a new populist cause which, of course, overlooks
the fact that compensation is generally determined
by the market. The Tyco’s of the future will have
no place to hide. MORE
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Are you happy with your
strategic planning process? If your answer is
‘no’, you are in the majority. In a recent survey
conducted by McKinsey Quarterly of executives
across many industries fewer than half of the
respondents were satisfied with their company’s
strategic planning process. Further, less than 25%
said that their process was key to making
important decisions. Clearly, there is room for
some improvement. According to the survey
responses, the improvements should include how the
plan is communicated, how it is aligned with the
organization and how performance is measured
against plan. For a complete discussion of results
of the survey click MORE
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A new study by the
University of Michigan says that executives gained
an average of $600,000 when their company
backdated stock option grants. But that cost is
peanuts no matter how it was booked. Faced with
investigations into backdating practices,
companies are now scrambling to avoid scandal and
the market is extracting its price on shareholders
to the tune of an average loss in market value of
$500 million. MORE
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It seems that women have
a greater feeling of financial insecurity than do
men. In a study by Allianz, 90% of
women said that they felt insecure and half
expressed fear of becoming a ‘bag lady.’
Amazingly, almost half of the respondents were
women earning more than $100,000 per year! By way
of comparison a study by Stowers
Innovations says that half of men surveyed
feel in control of their finances compared with
just over a third of women studied who felt that
way. MORE
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Got an idea? Jump in.
That’s the advice of successful entrepreneurs from
Harvard’s Working
Knowledge. Of course, that is also just
the beginning. Pick an industry that is going
through sea change. Trust your instincts, develop
solid mentors and hire smart people. Other factors
that will determine your likely success include
learning from your experiences and the experiences
of others. Find successful ‘old hands’ in the
industry and listen to what they have to say. Get
to market quickly. This should include a strategy
to build a customer base through acquisition or
partnerships avoiding ‘cold calls’. Funding?
Private equity should be sought as much for their
expertise – ‘adult guidance’ – as for the money
itself but be aware that they may not be as smart
as you are in your business. Better yet is the
‘angel investor’ that understands your
business. MORE
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| Reduce
Your Workplace Costs!
|
| The Chamber is offering
two important programs designed to help you reduce
your costs. First, a special one-day seminar will
be presented on the complicated subject of
workers' compensation in Illinois on October 18th
in Willowbrook. This seminar will feature
outstanding speakers who are practitioners in
workers' comp law. Then on October 27th the annual
one-day conference of the Chamber's nationally
recognized Drug-Free Illinois Workplace program
will be held in Oakbrook. Leading speakers will
cover topics that include how to reduce your costs
and the latest testing alternatives. We encourage
your organization to be represented at each of
these informative sessions. Click on the links
below for more information:
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The Transportation for
Illinois Coalition (TFIC) will be holding its
annual meeting on September 20, 2006 at the
University Club in Chicago. Co-chaired by Doug
Whitley, President and CEO of the Illinois Chamber
and Margaret Blackshere, President, Illinois
AFL-CIO, the TFIC is a broad coalition of business
and labor leaders dedicated to improving the
funding of transportation infrastructure in
Illinois. Click
here for agenda and registration information.
For the annual report of the TFIC click MORE
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| Current
Economic Indicators |
| Illinois
Chamber HELPLINE |
| Knowing what you can and
can't do will help you prevent costly mistakes.
Call our staff of HR experts. Let Pam Holleman
help you deal with problems safely and avoid
disputes. You can reach the Helpline toll-free at
800-322-4722. |
| |
SAVE 20% OR MORE ON YOUR
PAYROLL PROCESSING!
The
Illinois Chamber is offering an exclusive benefit
to Chamber members only! TruPay Corporation,
America's fastest growing payroll service now
offers its award-winning services to members of
the Illinois Chamber at special discounted rates
that could save you 20% or more. Click
here for more about this exciting new
opportunity.
Check out some of our other
programs and see how your membership pays with the
Illinois Chamber:
Learn more about these
programs and how they benefit your company when
you Join
the Leaders! |
| |
The Chamber urges
all Illinois employers to recognize their Guard
and Reserve employees by signing and displaying
the ESGR Statement of Support. To get yours,
simply complete
an online form and you will receive a
personalized certificate that demonstrates your
support. Also visit the SBA Veteran's Business
Development web site for assistance to small
business owners that have employees activated in
the Guard or Reserves. Click MORE
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The Exec
Report - Wood S.
McComb, Editor
Copyright © 2006 The Illinois
Chamber
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