Tag Archives: strategy development

Some Holiday Gifts

Leadership thoughts, retirement planning tips, fun for the holiday break

Some leadership ideas to consider while you’re away from the grind:
Having been on the leading edge of the quality push at GE, and taken to heart the GE values of integrity and candor, I loved this short piece: Integrity is Free
Interesting, quick tips on successful presenting skills, and an interesting blog to poke around in afterward. The 9 Biggest Mistakes When Presenting to Executives
Insightful piece on the interaction between culture and strategy. Culture Can Make or Break Strategy
You know what they say, actions speak louder than words Is It Time to Stop Saying Thank You

Timely thoughts for your retirement planning:
Great, you’ve saved a bundle in your 401(k), now what? A 401(k) Conundrum: Can You Make Your Cash Pile Last for Life?
A so called deep dive on the benefits of longevity annuities in retirement plans. A growing chorus is recognizing the value of longevity annuities
There will be a million opinions on this, here’s Morningstar’s: Now that annuities are OK in retirement plans, what strategy is best?
One of those periodic wake-up calls for you. Americans Are Not Remotely Financially Ready for Retirement

Since I hope you will have time to play around some, try these tidbits:
If you’re of a certain age, this will bring back a flood of memories. How fun that it isn’t as messy as it used to be! Nathan Friend’s Browser-Based Spirograph Emulator
I’ve harped a lot on the 100th anniversary of the Christmas Truce, but did you realize this Christmas Eve is the 200th anniversary of the last fighting between the US and Canada? Let’s Celebrate 200 Years of Peace Across the Border
There’s some pretty funny stuff in here … the longer you have been married, the more they will ring true. 30 Hilariously True Differences Between Men and Women
Bet you never heard one of these. A Guide to the Strange, Little-Known, Hard-to-Find Beatles Christmas Recordings

Questioning Shareholder Value

James Montier delivers a lengthy takedown of shareholder value in his piece. It is interesting because it gets into so many other areas like income inequality, CEO pay, business investment rates, and more. So many companies place credence in shareholder value that it is worth understanding the implications. I focus your attention on this one piece because I wonder what your reaction will be to this. So, please take a minute to share your thoughts.

The World’s Dumbest Idea

The Fallacy of Cost of Capital

The Fallacy of Cost of Capital in the Life & Annuity Industry

 

As a longtime business leader with GE, American Express and Ameriprise Financial, I came to expect the inevitability of cost of capital in annual planning and product development conversations. While the number generally had little discernible relationship with the true borrowing cost for the corporate parent, the construct made perfect sense: each P&L bears a reasonable cost for the invested capital carried on its balance sheet. As an independent advisor, I have come to realize that often times this cost is more implicit than explicit. Cost of capital appears most often in the guise of a hurdle rate. Whether considering new product design or a major technology investment, running a spreadsheet against the hurdle rate is a prerequisite. Once implemented, though, how does the cost of capital manifest itself in business unit financials? In an annuity or life business level P&L, for example, where significant issuance costs are capitalized and amortized; is the business charged a carrying cost at the cost of capital? Is there a journal entry from the parent, ultimately eliminated, mind you, reflecting the opportunity cost of this investment? Often not, which stifles creativity and confounds analysis of alternative capital structures. The parent is happy with a nominal 10% or 12% or 15% return. Have they accounted for the true cost? As businesses firm up the 2015 planning cycle, perhaps it is time to reflect on the efficacy of cost of capital execution and the downside risk of not fully accounting for the true cost of investment in business units. This recalibration may yield better corporate results by incentivizing scrutiny of invested capital, freeing up capital for long deferred investment projects. Call or email me to discuss this interesting insight and learn how it may inadvertently hamstring your growth.

Improve your leadership skills

Improve your leadership skills to deliver superior results
Plus: some weekly guidance on your retirement planning

Leadership tips and insights along with an interesting, emerging trend:
Talk about hot topics, so much written recently about purpose driven organizations, this one puts it into an interesting context, worth a fast read as I have always said feeling good about what you do helps you to do it better Your Company’s Purpose is not it’s Vision, Mission or Values
This is a fun, while still insightful, piece about the big influence the little things can have 10 Ways to Say the Right Thing Every Time
Yes, there has been a lot written about this, too, servant leadership, but here again, there’s a gem in this one about showing gratitude, it is hard to remember, but do it The One Attribute All ‘Servant Leaders’ Have in Common
This is a great article if you seem to be stumped for growth Eight Ways to Rethink Your Business Model
This is a really interesting, emerging trend, may work in your favor, if you are flexible Surge pricing is the next wave of digital ordering

Live a better retirement by planning now:
Of course an actuary created a tool to figure your retirement income needs, good thing is he’s shared it A simple tool for figuring retirement income
No rocket science here, but always good to be reminded, especially after this sustained bull run 2 Things You Have to do with Your Retirement Investments

Consensus & values as leadership tools

Consensus & values as leadership tools
Plus: lots of retirement advice and some really good diversions

Improving Your Leadership:
Remarkably timely advice on consensus building A Six-Step Consensus Decision Making Framework
Don’t sacrifice values for growth 4 ways purpose-driven CEOs can align purpose with revenue

Improve Your Retirement:
Is the retirement planning paradigm backwards? Retirement Investing: Are You Doing It All Wrong?
Almost no one saves enough for retirement. So, how do you make it work? A smart way to make your retirement money last
So, just how much money do you need to retire? Three Easy Retirement Rules of Thumb
Some, not all, things to consider in planning for retirement (I would add, don’t underestimate healthcare costs) How to Ruin Your Retirement Savings

Some Weekly Diversions:
Ronald Reagan, well planned, ‘off the cuff’ remarks The Reagan Wit
Did you hear the one about the TSA agent who didn’t know DC was part of the USA? Reporter stopped by TSA agent who didn’t know District of Columbia is in US