After decades of providing business tips and advice to others, Buffett was asked what the best piece of advice he’d ever received was. Surprisingly, the answer had nothing to do with business … at least not directly.

Buffett cited his father, who he credits with teaching him the power of “unconditional love.”

“The biggest lesson I got is the power of unconditional love,” Buffett explained. “If you offer that to your child you’re 90% of the way home. If every parent out there can extend that to their child at a very young age – it’s going to make for a better human being.”

Buffett couldn’t recall exactly what the worst advice he’d ever received was. But he did share this gem of wisdom he once received from close friend (and one-time business partner) Tom Murphy:

“Never forget, you can tell a guy to go to hell tomorrow … You don’t give up the right. So just keep your mouth shut today and see if you feel the same way tomorrow.”

Source: “Warren Buffett Interview: The Best Life Advice I’d Ever Received,” The Huffington Post, 7/8/10.

1. The Pulse of Commerce Index (PCI): PCI measures the amount of diesel fuel being purchased at truck stops around the country. The amount of goods carried by these trucks and the frequency of routes give economists a sense of how robust business is flowing.
   The good news: the PCI jumped 3.1% between April and May – the largest one-month increase since 1999.
2. Service sector shipments: The service sector measures the amount of scrap and waste material hauled off by trains every month. This statistic is always relevant because it reflects the rate of production in several industries, most notably manufacturing.
   The good news: Waste and scrap shipments hit their highest rate in 16 years last month, a solid indication businesses are ramping up production.
3. Electric output: The Edison Electric Institute monitors how much electricity the corporate sector uses every week.
   The good news: Usage for the first week in June was up nearly 11% from the same week in 2009, a sign of more employees, higher productivity and increased work hours.

What do you think? Are these all signs of a rebounding economy, or simply a reflection of businesses fighting an uphill battle to boost production and staff, despite ailing revenues?

Feel free to share your thoughts in the comments section below.

Source: “These Below-the-Radar Indicators May Signal Growth,”
by David Bogoslaw, BusinessWeek, 6/15/10.

The poll, which was conducted as part of the biannual Regus BusinessTracker study, included responses from more than 15,000 companies across a broad range of industries. Among the findings:

• 7% more companies are now reporting profits than were six months ago
• 12% more companies experiencing a boost in revenues rather than a decline
• 59% of large businesses advocate the importance of tax breaks for consumers and consumer spending
• the overall decline in revenues is most prevalent in the manufacturing industry, and
• the overall increase in revenues were most prevalent in the IT industry.

Despite the survey’s overall optimistic tone, when business execs were asked point blank when they expected a full economic recovery, the majority responded that they didn’t feel the economy would make a full recovery until December.

When execs were asked the same question six months ago, they believed a full recovery was possible by July.

What do you think of the survey’s findings? Agree? Disagree?

Feel free to share your thoughts in the comments section below.

Source: “Revenues Rising but Slowdown in Pace of Growth,” Industry Week, 5/5/10.

These come from Norm Brodsky, who specializes in small start-ups and weird ideas:

1. Get lost. That is, try spending less time at your business, not more. The main reasons:

• Stepping back gives you a better perspective on what’s going on in your business.
• You’re forced to train and delegate, and people under you are forced to learn and do.
• Investors are impressed by companies that don’t rely on one person to do everything. Mortality is a killer, if you know what we mean.

2. Do less marketing. In Brodsky’s experience, most companies spend too much time and resources on marketing fluff like slick brochures, which make your company look like every other company. Don’t be afraid to make your marketing materials look spartan and downscale. The basic look tells people you’re all business.

3. Drug test. Drugs are everywhere, and employees who use drugs are a drain on your company. Plus, drug testing makes your company more attractive to insurers, which can lead to lower rates.

4. Don’t pay commissions. That doesn’t mean you shouldn’t lay out incentives for your salespeople. It just means that straight commissions tend to separate your sales staff from the rest of your employees and give salespeople an excuse to run roughshod over other departments like billing and operations. Brodsky’s recommendation: a salary plus a three-part bonus tied to the success of the salesperson, the team, and the company.

5. Don’t hire employee referrals. Conventional wisdom says referrals are the cheap, easy way to hire. Here’s the problem — actually, two problems if the referral doesn’t work out:

1. Good employees resent that a slacker got hired on someone else’s say-so.
2. If the referral gets canned, there are almost always hard feelings with the person who made the referral.

Adapted from “Norm Brodsky’s 5 Most Contorversial Business Ideas.”

In a recent BusinessWeek interview, business expert David G. Thompson cited these seven traits as common practices among the top 5% of today’s high-growth companies:

1. The ability to deliver unique and exceptional value to customers: Top companies know how to differentiate themselves from the competition in such a way that customers associate the brand with superior value and service.
2. The foresight to target a high-growth market: Netflix revolutionized the video rental industry by identifying a need other major rental companies weren’t capitalizing on. The company expanded its reach by allowing members to stream movies online, and eventually, stream them directly to their TV. PriceLine has pinpointed a similar need in the travel industry, and its profits continue to soar as a result.
3. Having customers not only buy, but also sell for them: More than 70% of Amazon’s rising profits last year came from product suggestions — recommendations made based on either past buying history or customers suggesting products for one another based on common interest. The best companies are set up in such a way that customers become advocates, sometimes even earning incentives for recommending the business to
   friends and colleagues.
4. Leveraging alliances to break into new markets: Fast-growing companies forge strategic partnerships with other companies that can help them target new demographics, regions, or industries. Smart partnerships also allow companies to offer more products and services to their customers. Consider, for example, the partnership between Apple and AT&T to market the iPhone. It created a win-win for both companies, where exclusive demand drove subscription rates and profits sky high.
5. A business plan based on reinvesting profits and paying off debt: The most successful companies pay off their long-term debt as quickly as possible. This keeps their credit in line, while allowing them to reinvest profits and perhaps even borrow more, if there’s a plan for rapid expansion. The company may grow incrementally at first, but if there’s a solid business plan in place, there’s a potential for profits to boom and remain consistent.
6. Inside/Outside management teams: These companies split management focus and responsibilities based on internal operations and external factors. Specific managers focus on customer needs, industry trends, market changes, and business growth, while others keep their eye on improving internal operations, production, and morale.
7. Create a diverse group of top-level managers with different backgrounds and perspectives: Successful corporations fill their boards with business leaders, customers, industry experts, and others who have a vested interest in the company, but different perspectives on how (and why) to achieve success.

What do you think? Is Thomson’s assessment on the mark? Are there any keys that he missed?

Feel free to share your thoughts in the comments section below.

Source: “The 7 Essentials of High-Growth Companies,” by David Thomson, BusinessWeek.com

Or will it make its way into the business world with legitimate time and money-saving uses? Here’s what we’ve gleaned from the expert chat:

For nearly a decade, there have been rumors that “tablet” computers are the wave of the future, the cutting edge of where users want to be. But none of those prognositcations or premonitions have been realized. The iPad will carry some of that baggage.
But workers who now turn to their smartphones for many routine business tasks understand the limitations of a small, pocket-held device have become apparent.
So when analysts say the iPad is the intermediate device between the laptop and the smartphone, they’re actually saying it fixes some of the problems with both.

Other potential business uses:
•    Conference room tool for notetaking and collaboration
•    Repository for reference books, tables and charts by engineers, lawyers and accountants
•    Tool for acquiring and using business and audiobooks
•    Portable unit for IT managers to access servers and computers remotely using apps already developed for the iPhone, but this time with a much bigger screen for their work
•    Health care workers ability to chart patient information, access references or testing schedules without the kiosks or stations necessary with a laptop computer
•    Dynamic collaboration on documents using newly designed iWorks suite docs app
•    Built-in drawing tools that allow workers to create sketches of proposed plans or processes
•    “Show and Tell” features allow small scale presentations in meetings with co-workers or clients
•    As a tool for workers in the field who need to enter data easily and quickly without having to open and power up a laptop, and
•    Project management could be made more efficient and dynamic, especially if SaaS project management tools that use Web 2.0 technologies are used.

The survey, conducted by Pricewaterhouse Coopers, showed a 16% leap in CEO confidence between last year and this year, including 31% of CEOs who said they were “extremely confident” about their business prospects this year.

A similar poll, conducted as part of Forbes 2010 Small Business Owners’ Outlook Survey, revealed:

• 64% of CEOs plan to invest more aggressively this year
• 50% definitely plan to invest in growth and expansion
• 46% hope to pursue new or different revenue streams, and
• 41% plan to add to their staff

All of which is good news, but may be offset to some degree by the following:

• 80% of CEOs plan on continuing to seek out ways to cut costs over the next three years, and
• 25% said they plan to make additional staff cuts.

The sense of cautious optimism is mostly due to two outstanding fears most CEOs share:

1. The global economy will slip back into a downward spiral, resulting in an economic meltdown worse than the one we’ve already seen, and/or
2. Over-regulation will make it nearly impossible for companies to grow or diversify at the rate they otherwise could.

Which side of the fence do you fall on? Will the economy be back on track by the end of this year, or are the latest regulations and bipartisan politics forcing us into an even deeper hole?

Feel free to share your thoughts in the comments section below.

Source: “CEO Confidence Rebounds With Global Economy, Davos Survey Show,” by Simon Kennedy, Bloomberg.

Warren Buffett is one of the most successful entrepreneurs of all time. Here are three priceless sales takeaways from his keynote address at Berkshire Hathaway’s 2009 shareholder’s meeting:

1. “If you need to use a computer or a calculator to figure it out, you probably shouldn’t buy it.” A lot of sales organizations are rethinking their message and peppering prospects with charts and graphs that demonstrate long-term ROI. But most prospects just want a plain-English explanation of how you can help them cut costs or increase profits. Break it down. Keep it simple — it’s the only way to keep buyers engaged.
2. “You don’t want to be in a position where someone can pull the rug out from under you (or where you pull it out from under yourself).” Competitors are more aggressive than ever right now, eager for any chance to swoop in and steal away your buyers. Be sure salespeople maintain regular contact with customers, so issues are resolved quickly and they’re the first to know when someone else is trying to steal a customer’s business away.
3. “You’re not there to change people.” The selling process should always be less about your products and services, and more about the buyer’s needs. Find out where the pain is, and offer solutions that alleviate that pain. Remember, it’s a buyer’s market. And most buyers are inclined to do business with the salesperson who best understands their needs and can help them overcome their challenges.

So what do you think? Is Buffett on target or preaching old-school tactics in a shifting market? Share your thoughts in the Comments Box below.

Source: “A Back to Basics Weekend With Warren Buffett,” by Andrew Ross Sorkin, New York Times

1. Gas: We all remember the dog days of $4 a gallon. It wasn’t a pleasant time. But it forced people (and companies) to consider other options like carpooling, public transportation and telecommuting. For that reason an increased gas tax could become a very real possibility, with the government claiming it’s a tax consumers can avoid if they minimize their gas usage.
2. Online: With so many consumers doing their shopping online these days, the notion of adding an “online sales tax” has been proposed several times. It’s a dicey proposition, as there’s so much to regulate, and it could end up having a negative overall impact for online retailers, but it’s another “avoidable” tax a lot of taxpayers wouldn’t be subject to. The catch: As online shopping continues to gain popularity, the return from this type of tax would increase substantially.
3. Energy: Energy taxes are being sold to the public under the guise that “we’re all in this together.” In other words, we can all help make things better by contributing just a little bit more. Meanwhile, individual taxpayers and businesses can minimize the blow by taking measures to cut down on electricity and other energy sources.
4. Alcohol and tobacco: “Sin taxes” are the easiest for politicians to sell because they’re levied against people who choose to spend money on vices. Proponents of such taxes actually help make the argument by telling those affected by them, “If you don’t like it, quit.”
5. Corporate: The unemployment rate is brimming, and that means a ton of unemployment insurance claims, the majority of which are funded by business taxes. In order to keep replenishing that pot, the government could end up imposing additional “unemployment” taxes on businesses. It’s a bait-and-switch tactic that ultimately penalizes consumers, who wind up paying for the increases via lower wages and other cuts.

So what do you think? Would you consider any of these cuts a worthwhile alternative to increasing taxes on everyone? Are there any areas we missed here? We’d love to read what you think in the comments section below.

Source: “8 Sneaky Ways to Raise Taxes,” by Rick Newman, U.S. News and World Report, 2/2/10

1. Provide a promise, not a product: The legend goes that Walt Disney was sitting on a bench watching his daughters ride a carousel when he came up with the concept for Disney World. He noticed amusement parks and state fairs were always littered and poorly organized, and the employees were generally rude and resentful.
   His wife once asked, “Why do you want to build an amusement park? They’re so dirty.” To which Walt replied, “That’s the point. Mine won’t be.” From day one, Disney has focused on “the experience” as a key component to increasing the value of its parks.
2. Always exceed customers’ expectations: One of the reasons the Disney tradition stands the test of time is that Walt Disney was more critical of his creations than anyone else could ever possibly be. He was a relentless perfectionist with a keen eye for detail, often forcing projects to go over budget and past deadline because he wasn’t satisfied with the finished product.
3. Pursue your passion, and the money will follow: Walt Disney went bankrupt more than once, leveraging everything he had in terms of assets in order to build his studio, his films and his dreams. The more profit one project yielded, the bigger the next would be. His vision was constantly growing, and he used whatever capital he had to allow that vision to evolve. His films and theme parks were labors of love, built to revolutionize an industry, rather than maximize profits.
4. Stay true to your company’s mission and values: Walt Disney was famous for saying, “I hope that we never lose sight of one thing – that it was all started by a mouse.”
   Decades later, Mickey Mouse is still the crown jewel of the Disney franchise, representing all the good will and imagination Disney represents. He’s also a constant reminder that the company has strong roots and it embraces American values.
5. Differentiate your offer: Every facet of Disney’s operation is unique. Employees are called “associates,” visitors are called “guests,” creative designers are called “Imagineers.” And that’s just the beginning. The experience of being at a Disney theme park or staying at a Disney resort is all about creating a dream vacation – one where the attention to detail and personal service is just as memorable as the attractions themselves.
6. Lead by example and delegate: Walt Disney was the artist who originally sketched Mickey Mouse, as well as several of the other iconic Disney characters. He even voiced several characters and provided the inspiration for a lot Disney’s animated classics. But as he built a studio and then an empire, he hired reliable men and women who understood his vision and trusted them to translate that vision to others. By the time Walt broke ground on Disney World, he hadn’t drawn a character for decades, nor was he a daily fixture at creative meetings. He built a strong foundation and developed self-reliant managers who embraced his vision. That allowed him to turn his attention to even bigger dreams, while the company and its employees continued to prosper.
7. Defy convention: So much about Walt Disney’s rise was about bucking the odds and ignoring the critics, whether it was show biz insiders telling him no one would ever sit still for a feature-length animated film, or others saying Walt was crazy for buying acres and acres of murky swampland in central Florida, Disney always trusted his instincts first. Einstein once said, “Great spirits have always encountered violent opposition from mediocre minds.” Walt Disney was a perfect example.
8. Leave behind something to grow: According to one historian, “The true measure of a man’s greatness is what he’s left behind to grow.” Disney World didn’t even open its gates until nearly five years after Walt Disney’s death. And yet, the tradition continues to evolve, almost 45 years later. While Disney has diversified in a number of ways, it’s still the company that started with a mouse. Perhaps Walt himself put it best: “Disney Land is something that will never be finished, something I can keep ‘plussing’ and adding to. I just finished a live-action picture. It’s gone. I can’t touch it. I want something live, something that will grow. The park is that.”

Select quotes taken from The Quotable Walt Disney

Offering cash as an incentive isn’t exactly revolutionary, but several well-known banks have latched onto it recently because customers are just now receiving their holiday shopping bills and they’re eager for a slight monetary boost to start the new year.

Among the cash incentives banks are currently promoting:

• Capital One is offering a $200 bonus to any customer who opens a Rewards Checking account through Feburary 28th
• J.P. Morgan Chase is offering $125 to anyone who opens a checking account by January 15th, and
• Bank of America is offering $100 to anyone who opens a checking account before February 28th.

Offering cash as an incentive is usually a bait-and-switch tactic used to lock buyers into a long-term deal that maximizes the company’s potential for making money. The incentives banks are currently offering are no exception:

• To qualify for the Capital One and Chase promotions, customers need to set up direct deposit.
• To qualify for the Bank of America promotion, customers need to maintain a minimum checking account balance of $500.

Both of these terms were put in place to maximize the amount of money the banks hope to make by keeping these customers (e.g., direct deposit increases the chances a customer will stay with a bank for a prolonged period of time, etc.).

In fact, banks are so careful about protecting their investment that cash-incentive applicants have to pass an entire screening process, which includes credit and background checks. Only then can they be “approved” for an account (and the incentive that comes with it).

The takeaway: Cash incentives have tremendous potential for drawing new customers. But they could end up causing a major backlash if sales and service reps aren’t completely upfront about the terms and conditions attached to the deal. More importantly, companies need to take precautions to ensure they’re offering cash rewards to reliable customers who are sure to provide the company with a substantial return on investment long term. In other words, the odds need to be set up so that the house always wins in the end.

Can you think of any arguments for cash incentives? Against? Do you have any personal experience with receiving cash incentives as a customer? Feel free to share your feedback in the comments section below.

Source: “Banks Try to Lure New Customers with Cash,” by Aleksandra Todorova, Smartmoney.com, 1/8/2010

While financial experts may argue the many pros and cons of an anemic dollar, the New York Times has constructed a handy breakdown of who the biggest winners and losers are in today’s economy whenever the dollar goes belly up.

Among the biggest winners:

• Investors: The economic downturn has actually caused stocks to rise in correlation with the dollar dropping. When the financial crisis hit, global investors saw the dollar as a safe haven, boosting its value. More recently, investors are taking risks again, putting their money in other currencies. As a result, stocks are on the rise and the dollar has dropped … again.
• Countries with vast resources: A lot of commodities are bought and sold in U.S. dollars. When the dollar falls, the prices for these commodities (e.g., oil, energy sources, raw materials, etc.) spikes.
• American industry: When the dollar falls, so do prices for U.S. products in other countries. As a result, revenue and production in some industries may grow. The downside is that the imported raw materials and energy needed to produce these goods may rise.

Among the biggest losers:

• China’s central bank: Chinese currency is tied to the American dollar. As the dollar goes, so goes China’s renminbi. Unlike American stocks, when the dollar falls, Chinese holdings drop significantly.
• Foreign industry: When the U.S. currency flounders, a lot of imported products cost more in the U.S., causing foreign companies to lose international sales.

Who else loses big when the dollar sinks? Who’s actually in a position to thrive? Share your feedback in the comments section below.

Click here for the New York Times‘ complete chart.

The president met with a dozen banking representatives and told them that “the pendulum might have swung too far” in the direction of tightened lending since the financial meltdown. He said they have to loosen up to get the economy going again.

The bankers reportedly nodded but told the president that factors outside their control are preventing banks from lending. For instance:

• Reacting to the meltdown and accompanying fuzzy lending practices, federal regulators and auditors have tightened the screws on banks, making lenders skittish about loosening up, for fear of being penalized. And regulatory agencies have a fair degree of independence, so it’s not as if the White House can just order them to lighten up.
• Problems with collateral abound because of the drop in the real estate market. Many small businesses use real estate — sometimes an owner’s personal residence — to secure loans. With less security comes less lending.

So, while the president couldn’t guarantee that auditors would relax their standards or that there was a solution to the collateral problem, he promised to review the regs to make sure lending wasn’t being held up by pointless red tape.

At the recent White House jobs summit, President Obama got an earful from 130 business leaders. Here’s what they want — and what Obama is likely to try.

• Open more credit lines for small firms. The Big Boys in business are getting access to the credit they need — via big banks or stock deals. Not so for the Little Guys. Most of them rely on small or midsize banks, where credit is tightest.
  What Obama heard: Get more money into the hands of other-than-humongous bankers — with the stipulation that they lend it to smaller businesses. And stabilize the housing market and mortgages because home equity is a main source of financing for entrepreneurs.
• Set up hiring and expansion incentives. Even a small drop in business often means a drop in employees when you’re a smaller company. If President Obama wants employers to hire while business is still down, he’ll have to figure out some incentives.
  What Obama heard: Enact targeted tax credits (a) to companies that increase payrolls and (b) to businesses that do the research and development needed to expand business and hire more workers.
• Use “rescue” money to rescue businesses. Any program is going to cost money, and no one’s in the mood to increase the already-ballooning deficit. So one solution might be to divert some cash in the Troubled Asset Relief Program from the financial industry to a program that promotes jobs and small and midsize businesses.
  What Obama heard: Work with Congress to redistribute leftover TARP money. That’s complicated and requires more than just a stroke of the pen, since the money was appropriated for a specific purpose initially. But it’s not impossible.

Are you in one of the country’s premier job markets?  A new Web tool from indeed.com reveals which cities offer the most available jobs per unemployed resident. You might be stunned which city ranks head and shoulders above the rest.

The chart lists the 50 largest U.S. markets. The job-to-unemployed ratios are based on numbers from indeed’s national database of job listings and unemployment rates, so there may be a slight margin of error based on how those markets are shifting, as well as unlisted job postings, etc.

Some of these markets are slightly deceiving because they offer a lot of highly specialized jobs that can’t be filled by unqualified applicants (or vice versa).

Here are the top 10 U.S. cities in terms of available jobs per candidate:

1. Washington, D.C. (six jobs per candidate)
2. Jacksonville, FL (three jobs per candidate)
3. Baltimore, MD (one job per candidate)
4. Salt Lake City, UT (two candidates per job)
5. New York, NY (two candidates per job)
6. San Jose, CA (two candidates per job)
7. Hartford, CT (two candidates per job)
8. Oklahoma City, OK (three candidates per job)
9. Austin, TX (three candidates per job)
10. Boston, MA (three candidates per job)

While these markets offer opportunities in terms of growing business, emerging trends and a constant influx of new prospects, consider the following five markets that were ranked at the bottom of the list:

1. Detroit, MI (18 candidates per job … Whoa!)
2. Miami, FL (10 candidates per job)
3. Riverside, CA  (nine candidates per job)
4. Los Angeles, CA (eight candidates per job)
5. Portland, OR (seven candidates per job)

Click here for the full list of Job Market Competition.

Source: “Indeed Ranks the Most Crowded Job Markets“

On healthcare reform:

• Angela Braly, CEO of WellPoint (the nation’s leading health insurer): “The President is doing the right thing by bringing in leaders from hospitals, physicians, nurses, employers, advocacy groups, and private insurers, among others. Only by working together will we be able to develop a sustainable solution for America’s healthcare system.”
• Jeffrey Kindler, CEO, Pfizer: “Obama’s healthcare reform is making more progress than a lot of people would have predicted. We’re on the verge of a bill coming out of the House that’s clearly going to happen … The biggest challenge is this issue around the public plan. How do we pay for it? I do think we have to accept the reality that the vast majority of the people in this country get their insurance from employers and if we create a system that provides incentives for employers to not provide their employees with insurance, then under certain scenarios huge numbers of people under public option would move out of the employer system and into the public system. That would not be a good outcome because it would impose a tremednous financial burden on the taxpayers.”

On tax reform:

• Charles Schwab, Founder and Chairman, Charles Schwab: “What we haven’t done is restore the confidence of the people who create the jobs … The biggest uncertainty is: Where are taxes going to go? The quicker you can bring certainty[on that issue], the quicker you restore confidence.”
• Duncan Niederauer, CEO of NYSE Euronext, which operates the New York Stock Exchage: “A place where I do not think they struck the right chord is on the tax proposal regarding overseas earnings of multinational corporations headquartered in the U.S. The overwhelming view from that constituent group is that if the proposal were to go through, it would at best require a lot of U.S. headquartered companies to eliminate jobs to reduce costs and make up for the increased tax burden. More challengingly, it would encourage a lot of these companies to contemplate being incorporated elsewhere and potentially moving jobs out of this country.”

On business and regulation:

• Robert Greifeld, CEO, Nasdaq: “Within the leadership of the business community, there is concern and I would say that the attitude is not so much wait-and-see, but wary. They’re wary with respect to trade policy. They’re wary with respect to tax policy and obviously are also concerned with the burden of health-care costs. There’s a fair amount of trepidation in the business community and what the Administration policies might mean to their success in the future. In terms of the concern in the business community, I think, it is greater today than it was back in November.”
• Duncan Niederauer, CEO of NYSE Euronext: “We all know we need some regulatory reform here and to bring the opaque markets out of the shadows and into the light. But there’s a real danger, in our view, that there ends up being excessive regulation that stifles creation of new business and new jobs.”
• W. James McNerney, Jr.: “A level playing field for American companies and workers in international markets is more important than ever. I see clear evidence that the Administration understands the issue and its importance to U.S. economic health.”

Overall assessment:

• Donald Trump, CEO, The Trump Organization: “He’s handled the tremendous mess he walked into very well. He still has a daunting task ahead of him but he appears to be equal to the challenge. He has kept his eye on both national and international issues and his visits to foreign countries have shown him to be warmly received, which is certainly a change from the last Administration. I believe he should pay more attention to OPEC and what’s going on there, but overall I believe he’s done a very good job.”
• Michael Dell, Founder and CEO, Dell: “There are some aspects of what is in the economic recovery act around broadband, healthcare, and IT spending that we think are good things. We’re concerned, like many, that one word that seems to be missing from a lot of discussions is competitiveness. How do all of these things make America more competitive? It’s a word that should be used more in Washington.”
• Jeffrey Katzenberger, CEO, Dreamworks Animation: “I don’t think that any President in modern history has had to face a deeper or more difficult or more complicated set of issues from the first moment he set foot in the White House, and I think he has done an exceptional job of methodically working his way through that horrendous set of problems. He had to make a lot of decisions, and some of them will be wrong, but many, many of them will turn out right.”
• Mohamed El-Erian, CEO, Pimco: “On one side he has been able to stabilize the financial center and institute major structural reforms. And he still maintains enormous popularity with the American people. On the negative side, the jobs picture is worse than anticipated, and unemployment itself is becoming a big policy challenge. It’s going from being a lagging indicator to being a leading indicator. The major issue people are going to second guess in the next six months is his decision to pursue both agendas. Was that the right one or should have he done it sequentially?”

So what do you think? Which CEOs make valid points, which ones are off target? Where do you think the current administration’s succeeding, and where could it be more effective?

We welcome opposing (and parallel) points of view in the comments section below.

For the full article, including a complete breakdown of quotes from all 10 CEOs, check out “CEOs Rate Obama’s Performance,” by Joseph Weber,
Business Week, 8/3/09.

The study, conducted in part by Psychology of Sales Reluctance authors George Dudley and Sharon Goodson, was based on interviews with over 1,000 sales execs across multiple industries.

The findings reinforced that while certain factors (i.e., effort, opportunity, experience, etc.) can definitely impact salespeople’s potential for success, personal accountability seems to play the largest role in whether or not a new recruit develops into a sales superstar. To wit:

• Low performers often fear their cold calls will be seen as pushy or intrusive, while top performers assume their calls are always welcome because they have information that can benefit the prospect’s business.
• Low performers generally feel there are only certain hours of the day when cold calls should be made, while high performers feel any time is the right time (assuming the correct adjustments are made for time zones and callbacks are scheduled effectively).
• Low performers blame poor results on factors that are out of their control, like non-receptive prospects, bad leads or poor market conditions. Top performers are the first ones to evaluate their own performance, as well as key metrics, to determine what needs to be adjusted and how to go about doing so.

The study also revealed the following about hiring new salespeople:

• While a lot of managers make hiring decisions based on traditional criteria (e.g., years of experience, relationship skills, ability to close, etc.), the biggest indication of whether a sales candidate has superstar potential is whether or not he/she has a natural enthusiasm and willingness to prospect and network as often as possible. The study showed that while other skills are important, they don’t have nearly as much bearing if the salesperson isn’t constantly looking for new ways to meet (and build relationships with) new prospects.
• Job candidates who are hired based solely on their years of prior sales experience don’t necessarily live up to expectations, due in large part to their unwillingness to learn a new system after having “done the job” for so long.

For more, check out The Psychology of Sales Reluctance by George Dudley and Sharon Goodson, Behavioral Science Research Press, 2009.

This year’s Fortune 500 proves that despite the down economy, there are three things American consumers simply cannot do without - oil, cars and drugs. While several big-name corporations continue to thrive, we look at 10 companies that experienced epic meltdowns during the past year (and what led to their undoing): 

1. American International Group: AIG lost almost $100 billion in 2008. The company overextended itself by agreeing to pay off tons of high-risk mortgages if holders defaulted on their home loans. When the economy went south, a lot of those homeowners had no choice but to default and leave AIG holding the bag. The takeaway: Don’t bet what you don’t have.
2. Fannie Mae: As a government entity, Fannie Mae could borrow huge sums of money at very low interest rates, and it did so to the tune of 20 million mortgages. Unfortunately, when the housing crisis hit, borrowers ran for the hills and Fannie Mae was unable to pay back its loans. The takeaway: Never spread your business too thin.
3. Citigroup: With losses of nearly $30 billion last year, Citigroup’s fall from grace could be chalked up to a $14 billion loss in mortgage loans. But the company lost another $10 billion due to businesses it had acquired while revenues were soaring. The takeaway: Specialization spells success. The more diversified a company becomes in this economy, the more it risks dwindling profits.
4. Merrill Lynch: Like a lot of brokerages, Merrill Lynch was falling fast toward the end of 2008. That’s when CEO John Thain did something very smart - he arranged to sell the company to Bank of America. Then Thain did something very dumb – he demanded a huge bonus from his new employers and ended up losing his job. The takeaway: In a down economy, greed is not good.
5. Ford Motor: Much like GM and Chrysler, Ford was bleeding profits at an unprecedented clip throughout 2008. But the company brought in a new CEO, it offered a better payment plan for union employees, and it focused on improving its public image – a move which has already paid off (a recent survey revealed that nearly one-third of customers who considered buying a GM or Chrysler during the past six months ended up buying a Ford instead). The takeaway: In these trying times people want to do business with (and work for) a company that values their loyalty.
6. Time Warner: This media company lost roughly $13 billion in 2008. A lot of those losses have been attributed to the fact that the media world is shifting and the ripple effect has taken its toll on several industry giants. The takeaway: The future is now. Business is moving online, and those who can’t accept or adjust to that fact could suffer dire consequences.
7. Delta Air Lines: The acquisition of Northwest Airlines and the announcement of more flights to international destinations made it seem like Delta was on a roll. But the fuel costs associated with those routes and the cost of acquiring a major competitor translated into major losses. The takeaway: Always consider all the long-term risks associated with any major business move in a down economy, no matter how tempting on the surface.
8. Harrah’s Entertainment: The joint companies that bought Harrah’s in 2007 ended up taking a bath on their investment as consumers tightened their belts and cut out any unnecessary spending. The takeaway: Do as much research as possible before branching out into new markets. There are great opportunities to expand, but successful companies pick their spots wisely.
9. Macy’s: When consumer spending hit the skids, it took several retail chains down with it. Macy’s lost $5 billion last year, but continued to generate some profits thanks to a brisk online business. The takeaway: Sometimes it’s not the brand, but the marketing channels that need to change.
10. Coca-Cola: This soft-drink magnate was the victim of high fuel prices, as well as rising shipping and delivery costs in 2008. While Coca Cola has been fighting an uphill battle on those fronts for years, 2008 was particularly tough given the drop in consumer confidence. The takeaway: Always be on the lookout for unique ways to minimize ancillary costs without sacrificing the quality of your products or services.

Source: “The Fortune 500’s Biggest Losers” byTelis Demos.

Click here for a full list of this year’s Fortune 500 companies.

1. Know your walk-away point: With so many companies competing for every prospect’s dollar, it’s natural for customers to haggle for a lower price or better terms. Know what you’re willing to concede before the process begins, and never grant a concession without asking for something in return.
2. Differentiate your offer: The Internet makes it much easier for prospects to hop online and do competitive shopping. Be prepared by knowing what others on the market offer and why you can offer a better investment for each prospect’s dollar.
3. Find out where the current supplier is coming up short: This is where the prospect’s pain is. Ask questions to get to the heart of what you can offer prospects that their current supplier cannot, and use that as the focal point of your value proposition.
4. Establish multiple points of contact: The more people you know, the easier it is to gain a foothold at the prospect’s company (and determine how the buying decision will impact different departments). A lot of buying decisions need to be approved by a committee these days. The more members you can win over, the better your chance of gaining a majority vote.
5. Frame your offer in terms of how it benefits all parties involved: Most prospects understand that you’re trying to close them. Rather than pretending like it’s just about them, be honest about what your company is willing to offer to build a mutually beneficial partnership based on trust. The more prospects trust what you’re telling them, the stronger the relationship will be.

Source: “Strategies to Build Negotiating Power” by Geoffrey James.