Thursday, February 28, 2008
US weekly jobless claims up 19,000; continuing claims at over 2-yr high
WASHINGTON, Feb. 28, 2008 (Thomson Financial delivered by Newstex) -- The number of people filing new claims for unemployment insurance rose above expectations in the latest week while continuing claims for unemployment climbed to its highest level in over two years, the Labor Department said today.The number of first-time claims filed in the week ending Feb 23 rose by 19,000 to 373,000 from an upwardly revised 354,000 claims in the previous week. That's well above the 350,000 claims economists polled by Thomson's IFR Markets had expected.The unexpected increase in initial claims 'is a move towards levels providing a signal indicating recession,' said Joseph Brusuelas of IDEAglobal.'The level of claims this week now matches the four-week average recorded at the end of February 2001, immediately before the recession began in March,' said Ian Shepherdson of High Frequency Economics.But Richard Iley of BNP Paribas (OOTC:BPRBF) said the level of initial jobless claims are 'still surprisingly low,' adding that 'historically, weekly claims of around the 400,000 level have been associated with recession and negative non-farm payroll prints.'The Labor Department also reported that the four-week moving average for initial claims decreased by 1,250 to 360,500.Economists prefer the four week moving average because it smoothes out fluctuations in the weekly data.For the week ending Feb 16, the number of individuals continuing to receive unemployment insurance rose by 21,000 to 2.807 mln from an upwardly revised 2.786 mln claims in the previous week. That's above the 2.800 mln claims economists were expecting and the highest level since October 2005.The four-week moving average for continuing claims increased 24,250 to 2.778 mln, the highest level since October 2005.'The continuing claim data is consistent with a strong 5.0 pct rate of unemployment with a risk to the upside for the February payroll period,' Brusuelas said.Rising continuing claims 'suggests that it is becoming more difficult for people who have lost their job to find new employment,' said economists from Bear Stearns. (NYSE:BSC) 'Jobs are a clue about what happens with the economy' and while this week's jobless claims numbers indicate softening, 'I don't think its going to change the dollar's direction,' said Meg Browne of Brown Brothers Harriman.
Tuesday, February 26, 2008
Kill the HR Speak
The HR profession has managed to create a bewildering array of meaningless terms. When you’re in the realm of HR strategy, it is nearly impossible to read an article or view a PowerPoint that isn’t littered with terms like “business partner,” “seat at the table,” “organizational alignment” or “balanced scorecard.” Every function within the HR profession deserves some level of credit for creating confusion. These terms often emerge when corporate leaders are fed up and want something different, a situation that can lead HR leaders to re-brand the same old approaches and tools under a different name: “talent management” becomes “human capital management,” for example.
Why is the proliferation of HR speak a problem? To begin with, it builds a language wall between us and the rest of the business. If you’ve ever sat with a CEO during executive committee meetings, you’ll note that most executives have a relatively limited vocabulary. It often includes “hard” and easily measurable words like “profit,” “stock price,” “ROI” and “market share.” Executives also use a quantifiable language, one which is primarily made up of numbers and dollars. HR practitioners, in contrast, use in their presentations and conversations “soft” terminology like “emotional intelligence,” “work/life balance” and “empowerment.” These are almost totally devoid of numbers and dollars. And because it so often amounts to Orwellian doublespeak, HR speak causes a great deal of anxiety and confusion among both managers and employees.
Full article here: http://www.workforce.com/section/01/feature/25/37/75/index.html
Why is the proliferation of HR speak a problem? To begin with, it builds a language wall between us and the rest of the business. If you’ve ever sat with a CEO during executive committee meetings, you’ll note that most executives have a relatively limited vocabulary. It often includes “hard” and easily measurable words like “profit,” “stock price,” “ROI” and “market share.” Executives also use a quantifiable language, one which is primarily made up of numbers and dollars. HR practitioners, in contrast, use in their presentations and conversations “soft” terminology like “emotional intelligence,” “work/life balance” and “empowerment.” These are almost totally devoid of numbers and dollars. And because it so often amounts to Orwellian doublespeak, HR speak causes a great deal of anxiety and confusion among both managers and employees.
Full article here: http://www.workforce.com/section/01/feature/25/37/75/index.html
Monday, February 25, 2008
Top Jobs In 10 Industries
By Anthony Balderrama
Editor's note: CNN.com has a business partnership with CareerBuilder.com, which serves as the exclusive provider of job listings and services to CNN.com.Soon after you begin searching for a job, you might realize how many more opportunities are available than you initially thought. Information technology jobs like computer engineers and network systems analysts have high rates of growth.For some job seekers, it's a welcome discovery because they now have more choices. For others, it means they have to sift through more job posts to see what best suits them.Of the many factors you use to narrow down your search, such as salary and qualifications, one you should consider is projected job growth.A field that will experience an increase in demand and in newly created positions in the coming years means more stability. You don't want to switch to a new career only to be downsized shortly after you start.To help your search, we've put together a list of the top industries and the five hottest jobs in each, along with their median salaries. These jobs will experience strong growth and be in great demand for the next decade, according to the Bureau of Labor Statistics (BLS).Information technology1. Network systems and data communications analysts Projected growth by 2016: 53 percent Median annual salary: $64,600*2. Computer applications software engineers Projected growth by 2016: 45 percent Median annual salary: $79,7803. Database administrators Projected growth by 2016: 29 percent Median annual salary: $64,6704. Computer systems software engineers Projected growth by 2016: 28 percent Median annual salary: $85,3705. Network and computer systems administrators Projected growth by 2016: 27 percent Median annual salary: $62,130Service occupations1. Home health aides Projected growth by 2016: 49 percent Median annual salary: $19,4202. Makeup artists, theatrical and performance Projected growth by 2016: 40 percent Median annual salary: $31,8203. Medical assistants Projected growth: 35 percent Median annual salary: $26,2904. Skin care specialists Projected growth by 2016: 34 percent Median annual salary: $26,1705. Dental assistants Projected growth by 2016: 29 percent Median annual salary: $30,220Business and financial operations1. Personal financial advisors Projected growth by 2016: 41 percent Median annual salary: $66,1202. Financial analysts Projected growth by 2016: 34 percent Median annual salary: $66,5903. Management analysts Projected growth by 2016: 22 percent Median annual salary: $68,0504. Meeting and convention planners Projected growth by 2016: 20 percent Median annual salary: $42,1805. Cost estimators Projected growth by 2016: 19 percent Median annual salary: $52,940Health diagnosing and treating occupations1. Veterinarians Projected growth by 2016: 35 percent Median annual salary: $71,9902. Physician assistants Projected growth by 2016: 27 percent Median annual salary: $74,9803. Physical therapists Projected growth by 2016: 27 percent Median annual salary: $66,2004. Radiation therapists Projected growth by 2016: 25 percent Median annual salary: $66,1705. Registered nurses Projected growth by 2016: 23 percent Median annual salary: $57,280Education1. Preschool teachers, except special education Projected growth by 2016: 26 percent Median annual salary: $22,6802. Postsecondary teachers Projected growth by 2016: 23 percent Median annual salary: $56,1203. Self-enrichment education teachers Projected growth by 2016: 23 percent Median annual salary: $33,4404. Instructional coordinators Projected growth by 2016: 22 percent Median annual salary: $52,7905. Special education teachers, preschool, kindergarten and elementary school Projected growth by 2016: 20 percent Median annual salary: $46,360Sales1. Securities, commodities and financial services sales agents Projected growth by 2016: 25 percent Median annual salary: $68,5002. Counter and rental clerks Projected growth by 2016: 23 percent Median annual salary: $19,5703. Advertising sales agents Projected growth by 2016: 20 percent Median annual salary: $42,7504. Demonstrators and product promoters Projected growth by 2016: 18 percent Median annual salary: $22,1505. Sales representatives, wholesale and manufacturing, technical and scientific products Projected growth by 2016: 12 percent Median annual salary: $64,440Art and design1. Multimedia artists and animators Projected growth by 2016: 26 percent Median annual salary: $51,3502. Interior designers Projected growth by 2016: 19 percent Median annual salary: $42,2603. Fine artists, including painters, sculptors and illustrators Projected growth by 2016: 10 percent Median annual salary: $41,9704. Graphic designers Projected growth by 2016: 10 percent Median annual salary: $39,9005. Art directors Projected growth by 2016: 9 percent Median annual salary: $39,900Office and administrative support1. Customer service representatives Projected growth by 2016: 25 percent Median annual salary: $28,3302. Bill and account collectors Projected growth by 2016: 23 percent Median annual salary: $29,0503. Brokerage clerks Projected growth by 2016: 20 percent Median annual salary: $36,3904. Medical secretaries Projected growth: 17 percent Median annual salary: $28,0905. Executive secretaries and administrative assistants Projected growth by 2016: 15 percent Median annual salary: $37,240Installation, maintenance and repair occupations1. Medical equipment repairers Projected growth by 2016: 22 percent Median annual salary: $40,5802. Automotive glass installers and repairers Projected growth by 2016: 19 percent Median annual salary: $30,7203. Motorboat mechanics Projected growth by 2016: 19 percent
Median annual salary: $33,2104. Automotive service technicians and mechanics Projected growth by 2016: 14 percent
Median annual salary: $33,7805. Mobile heavy equipment mechanics, except engines Projected growth by 2016: 12 percent
Median annual salary: $40,440Construction1. Construction and building inspectors Projected growth by 2016: 18 percent
Median annual salary: $46,5702. Tile and marble setters Projected growth by 2016: 15 percent Median annual salary: $36,5903. Boilermakers Projected growth by 2016: 14 percent Median annual salary: $46,9604. Roofers Projected growth by 2016: 14 percent Median annual salary: $32,2605. Reinforcing iron and rebar workers Projected growth by 2016: 12 percent Median annual salary: $38,220
Editor's note: CNN.com has a business partnership with CareerBuilder.com, which serves as the exclusive provider of job listings and services to CNN.com.Soon after you begin searching for a job, you might realize how many more opportunities are available than you initially thought. Information technology jobs like computer engineers and network systems analysts have high rates of growth.For some job seekers, it's a welcome discovery because they now have more choices. For others, it means they have to sift through more job posts to see what best suits them.Of the many factors you use to narrow down your search, such as salary and qualifications, one you should consider is projected job growth.A field that will experience an increase in demand and in newly created positions in the coming years means more stability. You don't want to switch to a new career only to be downsized shortly after you start.To help your search, we've put together a list of the top industries and the five hottest jobs in each, along with their median salaries. These jobs will experience strong growth and be in great demand for the next decade, according to the Bureau of Labor Statistics (BLS).Information technology1. Network systems and data communications analysts Projected growth by 2016: 53 percent Median annual salary: $64,600*2. Computer applications software engineers Projected growth by 2016: 45 percent Median annual salary: $79,7803. Database administrators Projected growth by 2016: 29 percent Median annual salary: $64,6704. Computer systems software engineers Projected growth by 2016: 28 percent Median annual salary: $85,3705. Network and computer systems administrators Projected growth by 2016: 27 percent Median annual salary: $62,130Service occupations1. Home health aides Projected growth by 2016: 49 percent Median annual salary: $19,4202. Makeup artists, theatrical and performance Projected growth by 2016: 40 percent Median annual salary: $31,8203. Medical assistants Projected growth: 35 percent Median annual salary: $26,2904. Skin care specialists Projected growth by 2016: 34 percent Median annual salary: $26,1705. Dental assistants Projected growth by 2016: 29 percent Median annual salary: $30,220Business and financial operations1. Personal financial advisors Projected growth by 2016: 41 percent Median annual salary: $66,1202. Financial analysts Projected growth by 2016: 34 percent Median annual salary: $66,5903. Management analysts Projected growth by 2016: 22 percent Median annual salary: $68,0504. Meeting and convention planners Projected growth by 2016: 20 percent Median annual salary: $42,1805. Cost estimators Projected growth by 2016: 19 percent Median annual salary: $52,940Health diagnosing and treating occupations1. Veterinarians Projected growth by 2016: 35 percent Median annual salary: $71,9902. Physician assistants Projected growth by 2016: 27 percent Median annual salary: $74,9803. Physical therapists Projected growth by 2016: 27 percent Median annual salary: $66,2004. Radiation therapists Projected growth by 2016: 25 percent Median annual salary: $66,1705. Registered nurses Projected growth by 2016: 23 percent Median annual salary: $57,280Education1. Preschool teachers, except special education Projected growth by 2016: 26 percent Median annual salary: $22,6802. Postsecondary teachers Projected growth by 2016: 23 percent Median annual salary: $56,1203. Self-enrichment education teachers Projected growth by 2016: 23 percent Median annual salary: $33,4404. Instructional coordinators Projected growth by 2016: 22 percent Median annual salary: $52,7905. Special education teachers, preschool, kindergarten and elementary school Projected growth by 2016: 20 percent Median annual salary: $46,360Sales1. Securities, commodities and financial services sales agents Projected growth by 2016: 25 percent Median annual salary: $68,5002. Counter and rental clerks Projected growth by 2016: 23 percent Median annual salary: $19,5703. Advertising sales agents Projected growth by 2016: 20 percent Median annual salary: $42,7504. Demonstrators and product promoters Projected growth by 2016: 18 percent Median annual salary: $22,1505. Sales representatives, wholesale and manufacturing, technical and scientific products Projected growth by 2016: 12 percent Median annual salary: $64,440Art and design1. Multimedia artists and animators Projected growth by 2016: 26 percent Median annual salary: $51,3502. Interior designers Projected growth by 2016: 19 percent Median annual salary: $42,2603. Fine artists, including painters, sculptors and illustrators Projected growth by 2016: 10 percent Median annual salary: $41,9704. Graphic designers Projected growth by 2016: 10 percent Median annual salary: $39,9005. Art directors Projected growth by 2016: 9 percent Median annual salary: $39,900Office and administrative support1. Customer service representatives Projected growth by 2016: 25 percent Median annual salary: $28,3302. Bill and account collectors Projected growth by 2016: 23 percent Median annual salary: $29,0503. Brokerage clerks Projected growth by 2016: 20 percent Median annual salary: $36,3904. Medical secretaries Projected growth: 17 percent Median annual salary: $28,0905. Executive secretaries and administrative assistants Projected growth by 2016: 15 percent Median annual salary: $37,240Installation, maintenance and repair occupations1. Medical equipment repairers Projected growth by 2016: 22 percent Median annual salary: $40,5802. Automotive glass installers and repairers Projected growth by 2016: 19 percent Median annual salary: $30,7203. Motorboat mechanics Projected growth by 2016: 19 percent
Median annual salary: $33,2104. Automotive service technicians and mechanics Projected growth by 2016: 14 percent
Median annual salary: $33,7805. Mobile heavy equipment mechanics, except engines Projected growth by 2016: 12 percent
Median annual salary: $40,440Construction1. Construction and building inspectors Projected growth by 2016: 18 percent
Median annual salary: $46,5702. Tile and marble setters Projected growth by 2016: 15 percent Median annual salary: $36,5903. Boilermakers Projected growth by 2016: 14 percent Median annual salary: $46,9604. Roofers Projected growth by 2016: 14 percent Median annual salary: $32,2605. Reinforcing iron and rebar workers Projected growth by 2016: 12 percent Median annual salary: $38,220
Thursday, February 21, 2008
Shaky Economy Signals Opportunity To Refine Online Job-Hunting Skills
In a shaky economy, are you hoping to find a new job?
Even if you're tech-savvy, you may need to fine-tune your approach in today's quickly changing job market, experts say.
"There is a growing tendency, especially among younger job seekers, to turn to the Internet when they need to find a new job," said Gad Levanon, an economist at the Conference Board.
Sure, the Internet makes it easy to find and apply for jobs. But it also makes it easy for other applicants to compete for the same position.
At Monster.com MNST, potential candidates applied for 107 million positions and posted 16.4 million new resumes -- an average of 40,000 a day -- during the past year. Rival CareerBuilder.com lists more than 1.5 million jobs each month and works with more than 300,000 employers, including 93% of the Fortune 500.
Initially, these sites focused on management positions. But they have broadened their reach to a wider range of job categories encompassing everything from advertising to zoology.
While convenient, the influx of these new job sites creates new challenges for job hunters.
Security is a big one. Last summer, hackers attacked Monster.com and stole the personal details of several hundred thousand users -- names, addresses, phone numbers, e-mail addresses and other information.
And in November, hackers embedded malicious software into Monster's Company Boulevard pages, a section of the site designed to help job seekers research companies. Instead, the code turned visitors' PCs into remote-controlled zombies to deliver spam and malware.
The attack affected employment ads for a number of major brands, including Eddie Bauer EBHI, GMAC (NYSE:GM) Mortgage, Best Buy BBY, Toyota Financial TM and Tri Counties Bank.
Another challenge is finding the right job among all the clutter.
The Conference Board reported that online job sites had 4,270,000 listings in September. Sorting through all of them can be a full-time job in itself.
To make matters worse, the low cost of placing an ad makes them easy to forget. Some employers leave the listing up long after they've filled the position.
The first step in sifting through the mire is narrowing your search.
Start by searching the major job databases using keywords to describe the preferred position and other variables such as salary range and location.
Job-search engines from companies such as Indeed.com, SimplyHired.com, Juju.com and JustPosted.com compile listings from all the major job sites, capture new job postings and tailor the results to individual users.
Another way to narrow searches is by using job-hunting sites that target particular industries or regions.
"One recent change has been the growing popularity of regional job sites," said the Conference Board's Levanon. Regional sites list fewer positions than the megasites but offer more-targeted selections.
Jobs.com breaks all of its listings down by geographic area. JobCircle.com offers jobs in the Mid-Atlantic area exclusively.
Other sites focus on particular industries: Jupitermedia's JUPM Mediabistro lists positions in the publishing industry, while Chicago Computer Guider lists technology positions in that city.
Again, these sites don't have as many listings as the larger sites. But for certain job seekers, they'll have just the right ones. Newstex ID: IBD-0001-23168690
Originally published in the February 21, 2008 version of Investor's Business Daily.
Even if you're tech-savvy, you may need to fine-tune your approach in today's quickly changing job market, experts say.
"There is a growing tendency, especially among younger job seekers, to turn to the Internet when they need to find a new job," said Gad Levanon, an economist at the Conference Board.
Sure, the Internet makes it easy to find and apply for jobs. But it also makes it easy for other applicants to compete for the same position.
At Monster.com MNST, potential candidates applied for 107 million positions and posted 16.4 million new resumes -- an average of 40,000 a day -- during the past year. Rival CareerBuilder.com lists more than 1.5 million jobs each month and works with more than 300,000 employers, including 93% of the Fortune 500.
Initially, these sites focused on management positions. But they have broadened their reach to a wider range of job categories encompassing everything from advertising to zoology.
While convenient, the influx of these new job sites creates new challenges for job hunters.
Security is a big one. Last summer, hackers attacked Monster.com and stole the personal details of several hundred thousand users -- names, addresses, phone numbers, e-mail addresses and other information.
And in November, hackers embedded malicious software into Monster's Company Boulevard pages, a section of the site designed to help job seekers research companies. Instead, the code turned visitors' PCs into remote-controlled zombies to deliver spam and malware.
The attack affected employment ads for a number of major brands, including Eddie Bauer EBHI, GMAC (NYSE:GM) Mortgage, Best Buy BBY, Toyota Financial TM and Tri Counties Bank.
Another challenge is finding the right job among all the clutter.
The Conference Board reported that online job sites had 4,270,000 listings in September. Sorting through all of them can be a full-time job in itself.
To make matters worse, the low cost of placing an ad makes them easy to forget. Some employers leave the listing up long after they've filled the position.
The first step in sifting through the mire is narrowing your search.
Start by searching the major job databases using keywords to describe the preferred position and other variables such as salary range and location.
Job-search engines from companies such as Indeed.com, SimplyHired.com, Juju.com and JustPosted.com compile listings from all the major job sites, capture new job postings and tailor the results to individual users.
Another way to narrow searches is by using job-hunting sites that target particular industries or regions.
"One recent change has been the growing popularity of regional job sites," said the Conference Board's Levanon. Regional sites list fewer positions than the megasites but offer more-targeted selections.
Jobs.com breaks all of its listings down by geographic area. JobCircle.com offers jobs in the Mid-Atlantic area exclusively.
Other sites focus on particular industries: Jupitermedia's JUPM Mediabistro lists positions in the publishing industry, while Chicago Computer Guider lists technology positions in that city.
Again, these sites don't have as many listings as the larger sites. But for certain job seekers, they'll have just the right ones. Newstex ID: IBD-0001-23168690
Originally published in the February 21, 2008 version of Investor's Business Daily.
What It Takes To Be Great
The following is an excerpt from the article, "What It Takes To Be Great" published in Fortune magazine.
"The best people in any field are those who devote the most hours to what the researchers call deliberate practice. It's activity that's explicitly intended to improve performance, that reaches for objectives just beyond one's level of competence, provides feedback on results and involves high levels of repetition.
For example: Simply hitting a bucket of balls is not deliberate practice, which is why most golfers don't get better. Hitting an eight-iron 300 times with a goal of leaving the ball within 20 feet of the pin 80 percent of the time, continually observing results and making appropriate adjustments, and doing that for hours every day - that's deliberate practice."
Simply hitting your minimum activity numbers is not deliberate practice, which is why most sales reps don't get any better. Picking up the phone 175 times each day with a goal of setting 6 appointments and running three appointments 75 percent of the time, continually observiing results and making appropriate adjustments - that's deliberate practice.
Link to full article:
http://money.cnn.com/magazines/fortune/fortune_archive/2006/10/30/8391794/index.htm
"The best people in any field are those who devote the most hours to what the researchers call deliberate practice. It's activity that's explicitly intended to improve performance, that reaches for objectives just beyond one's level of competence, provides feedback on results and involves high levels of repetition.
For example: Simply hitting a bucket of balls is not deliberate practice, which is why most golfers don't get better. Hitting an eight-iron 300 times with a goal of leaving the ball within 20 feet of the pin 80 percent of the time, continually observing results and making appropriate adjustments, and doing that for hours every day - that's deliberate practice."
Simply hitting your minimum activity numbers is not deliberate practice, which is why most sales reps don't get any better. Picking up the phone 175 times each day with a goal of setting 6 appointments and running three appointments 75 percent of the time, continually observiing results and making appropriate adjustments - that's deliberate practice.
Link to full article:
http://money.cnn.com/magazines/fortune/fortune_archive/2006/10/30/8391794/index.htm
Wednesday, February 20, 2008
Fed Sees Economic Slowdown
NEW YORK (CNNMoney.com) -- The Federal Reserve cut its growth forecast for the economy and said it sees higher unemployment for the rest of 2008.
The central bank said it now sees the economy growing at a rate between 1.3 to 2% this year, down from its previous forecast from October of growth between 1.8% and 2.5% for 2008.
The Fed also said it expects the unemployment rate for the year to be between 5.2% and 5.3%, up from the 4.8 % to 4.9% range previously given.
This gloomier forecast, which was hinted at by Federal Reserve Chairman Ben Bernanke in testimony to the Senate Banking Committee last week, was released along with the minutes from the Fed's two meetings it held in January.
The Fed slashed interest rates twice last month in an attempt to ward off a recession. It cut rates by three-quarters of a percentage point on January 22 following an emergency meeting the day before and followed that with a half-point cut on January 30.
According to the minutes from the emergency meeting, at least one member argued the Fed should wait until its regularly scheduled meeting later that month to announce a rate cut.
"Some concern was expressed that an immediate policy action could be misinterpreted as directed at recent declines in stock prices, rather than the broader economic outlook," read the minutes.
This meeting took place while U.S. markets were closed for the Martin Luther King, Jr. holiday. But overseas markets were experiencing a steep sell-off that day, fueling fears that stocks would plunge on Wall Street when the U.S. markets resumed trading on January 22.
The central bank said it now sees the economy growing at a rate between 1.3 to 2% this year, down from its previous forecast from October of growth between 1.8% and 2.5% for 2008.
The Fed also said it expects the unemployment rate for the year to be between 5.2% and 5.3%, up from the 4.8 % to 4.9% range previously given.
This gloomier forecast, which was hinted at by Federal Reserve Chairman Ben Bernanke in testimony to the Senate Banking Committee last week, was released along with the minutes from the Fed's two meetings it held in January.
The Fed slashed interest rates twice last month in an attempt to ward off a recession. It cut rates by three-quarters of a percentage point on January 22 following an emergency meeting the day before and followed that with a half-point cut on January 30.
According to the minutes from the emergency meeting, at least one member argued the Fed should wait until its regularly scheduled meeting later that month to announce a rate cut.
"Some concern was expressed that an immediate policy action could be misinterpreted as directed at recent declines in stock prices, rather than the broader economic outlook," read the minutes.
This meeting took place while U.S. markets were closed for the Martin Luther King, Jr. holiday. But overseas markets were experiencing a steep sell-off that day, fueling fears that stocks would plunge on Wall Street when the U.S. markets resumed trading on January 22.
Will Microsoft's Proxy Threat Force Yahoo!'s Hand?
Despite considering a number of potential alternatives to a takeover by Microsoft Corp. (MSFT) in recent weeks, Yahoo! Inc.'s (YHOO) options appear to be down to accepting the software maker's $41 billion takeover offer, returning to the bargaining table in hopes of drawing a modestly higher bid, or succumbing to a long and potentially ugly proxy contest.
That's the assessment of many analysts and corporate governance experts following media reports that Microsoft would not increase its offer for the Sunnyvale, Calif., Internet media company, and is gearing up to take control of Yahoo!'s board of directors. All 10 of Yahoo!'s board members are up for re-election at the company's next annual meeting. Microsoft must nominate its slate of candidates by March 13.
Analysts said Microsoft's move to threaten a proxy fight could be enough to force Yahoo! to enter deal talks, especially if the Internet company fails to make progress in arranging other deals. The company has been linked to transactions including mergers with News Corp. (NWS) subsidiary MySpace and Time Warner Inc.'s (TWX) AOL.
"No board wants to be forcibly extracted," said Rob Enderle, principal analyst with Enderle Group, a San Jose, Calif., technology consulting firm.
Paul Lapides, director of the Corporate Governance Center at Kennesaw State University in Kennesaw, Ga., emphasized that the mere threat of a proxy battle could be a powerful negotiating tool for Redmond, Wash.-based Microsoft winning Yahoo! at its original offer price.
"Part of this is really just a matter of how do you get people to sit down and talk and get to a reasonable agreement," Lapides said, calling Microsoft's talk of a governance fight "another tactic to get it closer to the finish line."
This does not mean Microsoft will hesitate to carry through with its threat, but it does increase the chances that Yahoo! will reconsider its current position opposing the Microsoft offer. "It is easier to negotiate before you have dissident shareholders on your board," said Lapides who added, "Yahoo! is not against selling."
Since Microsoft made its unsolicited $31 per share offer for Yahoo! three weeks ago, there has been a strong sense that the software giant would ultimately prevail, given that the price it offered was a 60% premium over Yahoo!'s share price and that the latter faces a challenging year amid a budding recession, which is expected to damp online advertising revenues.
Another key issue affecting a possible proxy challenge is the significant shareholder overlap between the two companies. Capital Research & Management Co. is the top institutional shareholder in both companies, owning 2.7% of Microsoft shares and 11.4% of Yahoo!'s stock. Several of Yahoo!'s other top institutional shareholders, including Vanguard Group Inc., Barclays Global Investors, State Street Global Advisors and Fidelity Management & Research Co., are also Microsoft investors.
In a report issued last week, RiskMetrics Group (RMG) noted that this overlap in ownership could favor Microsoft because they were likely to be more concerned about Microsoft overpaying for Yahoo! than they are interested in Yahoo! fetching an even higher premium.
Microsoft's stock has fallen from $32.60 before its bid was announced on Feb. 1 to $28.42 on Tuesday on concern over the challenges of absorbing struggling Yahoo!.
Although Microsoft continues to hold the advantage, governance experts noted the difficulty of overhauling a company's board, even when the business is struggling and needs a change. One such expert, who asked not to be named, said Microsoft must come up with a qualified board slate that can pass muster with all the proxy solicitation firms that review these contests and make recommendations.
"It will still be incumbent on Microsoft to demonstrate that their bid offers good value," he said.
That's the assessment of many analysts and corporate governance experts following media reports that Microsoft would not increase its offer for the Sunnyvale, Calif., Internet media company, and is gearing up to take control of Yahoo!'s board of directors. All 10 of Yahoo!'s board members are up for re-election at the company's next annual meeting. Microsoft must nominate its slate of candidates by March 13.
Analysts said Microsoft's move to threaten a proxy fight could be enough to force Yahoo! to enter deal talks, especially if the Internet company fails to make progress in arranging other deals. The company has been linked to transactions including mergers with News Corp. (NWS) subsidiary MySpace and Time Warner Inc.'s (TWX) AOL.
"No board wants to be forcibly extracted," said Rob Enderle, principal analyst with Enderle Group, a San Jose, Calif., technology consulting firm.
Paul Lapides, director of the Corporate Governance Center at Kennesaw State University in Kennesaw, Ga., emphasized that the mere threat of a proxy battle could be a powerful negotiating tool for Redmond, Wash.-based Microsoft winning Yahoo! at its original offer price.
"Part of this is really just a matter of how do you get people to sit down and talk and get to a reasonable agreement," Lapides said, calling Microsoft's talk of a governance fight "another tactic to get it closer to the finish line."
This does not mean Microsoft will hesitate to carry through with its threat, but it does increase the chances that Yahoo! will reconsider its current position opposing the Microsoft offer. "It is easier to negotiate before you have dissident shareholders on your board," said Lapides who added, "Yahoo! is not against selling."
Since Microsoft made its unsolicited $31 per share offer for Yahoo! three weeks ago, there has been a strong sense that the software giant would ultimately prevail, given that the price it offered was a 60% premium over Yahoo!'s share price and that the latter faces a challenging year amid a budding recession, which is expected to damp online advertising revenues.
Another key issue affecting a possible proxy challenge is the significant shareholder overlap between the two companies. Capital Research & Management Co. is the top institutional shareholder in both companies, owning 2.7% of Microsoft shares and 11.4% of Yahoo!'s stock. Several of Yahoo!'s other top institutional shareholders, including Vanguard Group Inc., Barclays Global Investors, State Street Global Advisors and Fidelity Management & Research Co., are also Microsoft investors.
In a report issued last week, RiskMetrics Group (RMG) noted that this overlap in ownership could favor Microsoft because they were likely to be more concerned about Microsoft overpaying for Yahoo! than they are interested in Yahoo! fetching an even higher premium.
Microsoft's stock has fallen from $32.60 before its bid was announced on Feb. 1 to $28.42 on Tuesday on concern over the challenges of absorbing struggling Yahoo!.
Although Microsoft continues to hold the advantage, governance experts noted the difficulty of overhauling a company's board, even when the business is struggling and needs a change. One such expert, who asked not to be named, said Microsoft must come up with a qualified board slate that can pass muster with all the proxy solicitation firms that review these contests and make recommendations.
"It will still be incumbent on Microsoft to demonstrate that their bid offers good value," he said.
Monday, February 4, 2008
Creating a sense of urgency, or "Hurry up and buy!"
by Jeffrey Gitomer (www.gitomer.com)
One of the questions I always get is, "How can I create a greater sense of urgency in the buyer?"
The questions you need to ask yourself are:
• Is this person really the decision-maker? And usually he or she isn't.
• Do they have a sense of urgency?
• Is there an objection you haven't uncovered?
• Do they really want you?
I'm going to address this issue from both sides. Why they will and why they won't decide. It's a perspective issue, not an opposite issue. (Half full, half empty, or partly cloudy, partly sunny.)
Why do people decide they will buy?They believe it's safe. The customer feels that buying presents a safer way to go than the way they have right now.
They're willing to risk. They believe risk is lower than the reward of ownership. Risk is measured by tolerance. And risk is often unspoken. No one is going to say, "I'm afraid to buy." Rather they'll say, "your price s to high."
They believe it's the best deal. They have sold themselves, or justified the emotion of the moment with the logic of afterthought.
They want it bad. Emotion drives purchase. People will line up a day in advance, pre-order months in advance, and pay hundreds of extra dollars to get what they really want. HARD QUESTION: How can you get people to "really want" what you're selling? The answer lies within the four secret words of selling: "perceived difference" and "perceived value."
They're passionate for it. Sports, weekend, hobby, ball game, or eBay. Willing to pay fast and maybe pay a premium. Whatever it is, price is not the issue.
They need it bad. When hurricane Hugo hit Charlotte, North Carolina, in 1989 two-hundred-dollar chainsaws were selling for a grand. Don't even ask about bottled water. The price of gas doesn't matter when your tank is empty, neither does the price of cigarettes when you need one and you're out. Out of stock and production has stopped? Price bows to availability. Impulse. See it. Want it. Justify it. Buy it.
Greed. They believe that if they buy, that they will make a significant gain, or keep someone else from getting it. (eBay is a classic example of "gotta have it.")
Vanity. They believe that if they buy, they will look better or gain "one-up" on someone.
Fear. They're afraid that if they don't buy that they will lose. NOTE: Fear of loss is greater than desire to gain.
There are tons of other triggers for urgency. Here's a list -- pick the ones your customers might use, or one you might relate to: Deadline. Lowest price. Convinced by self. Persuaded by others. Must get this done. Compromise (not what I really want – but it's the most practical). Things on sale. Deals. Lowest price.
REALITY of URGENCY: It's not just what I want, or what I need. It's what I feel safe buying, and when is the best time to buy. It's complex. There is no answer for "urgency." Especially when YOU need the sale and the customer is hesitating for no apparent reason.It's their motive, emotion, and logical justification balanced with their tolerance for risk, and you can even throw in outside influences. YIKES!Many decisions are made based on the person making the sale.
Reflection of who you are – your beliefs and principles – the salesperson's passion and self-belief being transferred.The type of person you are determines your motives to buy. Same with your customer. Me personally, I don't settle. If a store or a supplier has a "similar product" but not the brand I want, I go to another store or another vendor. Or I'll just not make a purchase at all.
Others will settle. Which are you? More important, which are the buyers you're trying to convince? And while there is no one answer -- your understanding of the situation will help you gain awareness of each specific situation. If you need more information on urgency, go to www.gitomer.com, register if you're a first time user, and enter the word URGENT in the GitBit box.
Challenging Google
What happened
Google on Sunday offered to help Yahoo! fend off a hostile, $44.6 billion takeover bid from Microsoft, and said the deal would raise "troubling" antitrust questions because it could make Microsoft too powerful. Microsoft lawyers dismissed the concerns, saying that joining together Microsoft and Yahoo! would make the marketplace more competitive by creating a "more compelling No. 2 competitor for Internet search and online advertising," which Google dominates. (The Wall Street Journal)
What the commentators said
“The Yahoo! merger is classic Microsoft,” said Farhad Manjoo in Salon, in that it is “a brilliant stock move” rather than a technical innovation of any sort. But that’s the problem with it: Yahoo! and Microsoft both lack Google’s “relentless culture of creation.” Google is “eating everyone’s lunch simply because it makes things faster, better, and more useful than anyone else—and Microhoo will have no better way than Yahoo! and Microsoft did to replicate that engineering feat.”
That’s true right now, said Chris Wilson in Slate. But a combined Microsoft-Yahoo! “would be in great position to head Google off at the pass” for the Web’s next big thing. Google owns the search market, but the three companies have been racing to capture the market on “the rest of the Web experience”—photos, music, and office productivity applications. Mix Yahoo!’s strength as the No. 1 Web portal with Microsoft’s dominant position in “offline software,” and you have “the ingredients for a powerful Google alternative.”
That looks good on paper, said Paul Maidment and Dan Bigman in Forbes.com. But the merger faces two serious threats: “Microsoft and Yahoo!” The marriage of “these two legendary bureaucracies” will be a “nightmare.” Plus, Yahoo! is a directionless mess while Microsoft has one speed: slow. But good idea or not, “this deal will close.” Sure, there will be perfunctory antitrust “teeth-gnashing, especially in Europe,” but Microsoft set too high a bid for anyone else to counter—except maybe Google, and that seems “unlikely.”
Don’t discount the antitrust concerns, said John Dvorak in MarketWatch. The EU will never go for it, nor should they, and “I will personally be stunned if this deal, in the end, passes muster and is actually consummated.” Microsoft and Yahoo! are dominant Web portals and top players in free email, groups, and content delivery. “How is this NOT an anti-trust violation”?
Google on Sunday offered to help Yahoo! fend off a hostile, $44.6 billion takeover bid from Microsoft, and said the deal would raise "troubling" antitrust questions because it could make Microsoft too powerful. Microsoft lawyers dismissed the concerns, saying that joining together Microsoft and Yahoo! would make the marketplace more competitive by creating a "more compelling No. 2 competitor for Internet search and online advertising," which Google dominates. (The Wall Street Journal)
What the commentators said
“The Yahoo! merger is classic Microsoft,” said Farhad Manjoo in Salon, in that it is “a brilliant stock move” rather than a technical innovation of any sort. But that’s the problem with it: Yahoo! and Microsoft both lack Google’s “relentless culture of creation.” Google is “eating everyone’s lunch simply because it makes things faster, better, and more useful than anyone else—and Microhoo will have no better way than Yahoo! and Microsoft did to replicate that engineering feat.”
That’s true right now, said Chris Wilson in Slate. But a combined Microsoft-Yahoo! “would be in great position to head Google off at the pass” for the Web’s next big thing. Google owns the search market, but the three companies have been racing to capture the market on “the rest of the Web experience”—photos, music, and office productivity applications. Mix Yahoo!’s strength as the No. 1 Web portal with Microsoft’s dominant position in “offline software,” and you have “the ingredients for a powerful Google alternative.”
That looks good on paper, said Paul Maidment and Dan Bigman in Forbes.com. But the merger faces two serious threats: “Microsoft and Yahoo!” The marriage of “these two legendary bureaucracies” will be a “nightmare.” Plus, Yahoo! is a directionless mess while Microsoft has one speed: slow. But good idea or not, “this deal will close.” Sure, there will be perfunctory antitrust “teeth-gnashing, especially in Europe,” but Microsoft set too high a bid for anyone else to counter—except maybe Google, and that seems “unlikely.”
Don’t discount the antitrust concerns, said John Dvorak in MarketWatch. The EU will never go for it, nor should they, and “I will personally be stunned if this deal, in the end, passes muster and is actually consummated.” Microsoft and Yahoo! are dominant Web portals and top players in free email, groups, and content delivery. “How is this NOT an anti-trust violation”?
Friday, February 1, 2008
Job shock: U.S. lost 17,000 in January; unemployment rate slips to 4.9%.
Job shock: U.S. lost 17,000 in January
Employers trim payrolls, as government report shows first drop in four years; unemployment rate slips to 4.9%.
By Chris Isidore, CNNMoney.com senior writer
February 1 2008: 4:18 PM EST
NEW YORK (CNNMoney.com) --
Employers trimmed jobs from their payrolls in January, according to a government jobs report Friday that showed the first decline in employment in four years. That raised new concerns about the risk of recession for the weakening U.S. economy.
There was a net loss of 17,000 jobs in the month, according to the Labor Department reading. That was partly balanced by a sharp revision higher for the December reading to a gain of 82,000 jobs from the original reading of only an 18,000 increase.
Economists surveyed by Briefing.com had looked for a gain of 70,000 jobs for January.
The figures showed January as having the first decline in payrolls since August 2003. But the drop was based on the preliminary reading, which is subject to revisions. There have been a few months in the last four years, including August 2007, when the preliminary payroll reading showed a decline was later revised to a gain.
The unemployment rate slipped to 4.9%. Economists had forecast it would remain at the 5% rate reported for December. The drop in the unemployment rate, which is based on a different survey than the one used to calculate U.S. payrolls, was partly due to updated population figures used at the start of the new year.
Rising recession fears
Despite the upward revision in the December payroll reading and the slight decline in unemployment, there was more weakness than strength in the report. The government made its annual revision to all 2007 employment readings and found a 191,000 drop in jobs, even with the big adjustment higher in December.
The report also showed the average hours worked in the private sector declined in January to 33.7 hours from 33.8 in December. That drop, coupled with only a narrow 4-cent gain in the average hourly wage, resulted in the first drop in weekly wages since April.
The weakening state of the labor market has become a growing concern for economists, policymakers and Wall Street in recent weeks, as well as the general public.
Federal Reserve cited evidence of a "softening in labor markets" when it announced both of its rate cuts late last month. Congress is rushing to pass a $150 billion stimulus package that the Bush administration said should add 500,000 jobs to the economy.
President Bush, speaking to employees of Hallmark Cards in Kansas City, Mo., said the employment report is a reason that Congress needs to act quickly on the proposed stimulus package.
"The sooner we can get money into our consumers' hands, the more likely it is that this economy will recover from this period of uncertainty," he said. "The fundamentals are strong, we're just in a rough patch, as witnessed by the employment figures today."
"I'm confident we can get through this rough patch," he added.
Some leading Democrats were quick to seize on the jobs report as a sign that the administration needs to do more about the economy.
"This report underscores why it is absolutely critical that we include in any stimulus package extended unemployment insurance for those who are losing their jobs and looking for work in our ailing economy," said a statement from Sen. Hillary Clinton, one of the two leading Democratic presidential candidates. "We need more than tax rebates and business incentives to fix our ailing economy."
Sen. Charles Schumer, D-N.Y., chairman of the Joint Economic Committee of Congress, said at a panel hearing that "any doubts that we are heading into a recession should be erased with today's employment report."
"I'm concerned that the last few years of lower-than-expected job growth will look good compared to the job shrinkage we may well see in the coming months," he added.
Testifying at the hearing, Keith Hall, the commissioner of the Bureau of Labor Statistics, agreed that the employment situation is worrisome to the overall economy.
"We have seen job losses fairly widely spread," he said. "We've had periods like this before. We don't want this to continue."
Will Fed step in again?
Still, some economists say after cutting interest rates by 1.25 percentage points in just the last two weeks, the Fed is unlikely to take any immediate action to boost the economy, even with this new sign of weakness. The central bank's policymakers will have another employment report to consider before they next meet March 18.
"I do not think this report compels the Fed to do anything," said economist Robert Brusca. "The Fed has eased a lot. Monetary policy works with a lag. The Fed knows weak data will continue for a while after its cuts. It will need to see something much weaker than this to get itself hopped up for another rate cut."
Other economists said they do expect the Fed to resume making cuts at its upcoming meetings.
"I think we're seeing some actual job loss. I'm not surprised by the number," said David Kelly, chief market strategist for JPMorgan Funds. "There is weakness in the payroll numbers and we're wobbling on the edge of recession."
"But America is not overstaffed today," he added. "That should limit job losses in the future."
Wachovia senior economist Mark Vitner said he doesn't believe the economy will fall into recession, but he conceded there is weakness in hiring. But he said it's more a matter of businesses not hiring than making steep job cuts.
"There's no question businesses are more cautious in their hiring plans," he said.
That view was echoed by Jeff Kaye, CEO of executive recruiter Kaye Bassman International.
"I don't think we're heading to layoffs other than the obvious sectors that are being pounded," he said. "But we're seeing companies on hold on hiring; they're in a wait-and-see posture to see what happens with economy."CNNMoney.com staff writer David Goldman contributed to this report
Employers trim payrolls, as government report shows first drop in four years; unemployment rate slips to 4.9%.
By Chris Isidore, CNNMoney.com senior writer
February 1 2008: 4:18 PM EST
NEW YORK (CNNMoney.com) --
Employers trimmed jobs from their payrolls in January, according to a government jobs report Friday that showed the first decline in employment in four years. That raised new concerns about the risk of recession for the weakening U.S. economy.
There was a net loss of 17,000 jobs in the month, according to the Labor Department reading. That was partly balanced by a sharp revision higher for the December reading to a gain of 82,000 jobs from the original reading of only an 18,000 increase.
Economists surveyed by Briefing.com had looked for a gain of 70,000 jobs for January.
The figures showed January as having the first decline in payrolls since August 2003. But the drop was based on the preliminary reading, which is subject to revisions. There have been a few months in the last four years, including August 2007, when the preliminary payroll reading showed a decline was later revised to a gain.
The unemployment rate slipped to 4.9%. Economists had forecast it would remain at the 5% rate reported for December. The drop in the unemployment rate, which is based on a different survey than the one used to calculate U.S. payrolls, was partly due to updated population figures used at the start of the new year.
Rising recession fears
Despite the upward revision in the December payroll reading and the slight decline in unemployment, there was more weakness than strength in the report. The government made its annual revision to all 2007 employment readings and found a 191,000 drop in jobs, even with the big adjustment higher in December.
The report also showed the average hours worked in the private sector declined in January to 33.7 hours from 33.8 in December. That drop, coupled with only a narrow 4-cent gain in the average hourly wage, resulted in the first drop in weekly wages since April.
The weakening state of the labor market has become a growing concern for economists, policymakers and Wall Street in recent weeks, as well as the general public.
Federal Reserve cited evidence of a "softening in labor markets" when it announced both of its rate cuts late last month. Congress is rushing to pass a $150 billion stimulus package that the Bush administration said should add 500,000 jobs to the economy.
President Bush, speaking to employees of Hallmark Cards in Kansas City, Mo., said the employment report is a reason that Congress needs to act quickly on the proposed stimulus package.
"The sooner we can get money into our consumers' hands, the more likely it is that this economy will recover from this period of uncertainty," he said. "The fundamentals are strong, we're just in a rough patch, as witnessed by the employment figures today."
"I'm confident we can get through this rough patch," he added.
Some leading Democrats were quick to seize on the jobs report as a sign that the administration needs to do more about the economy.
"This report underscores why it is absolutely critical that we include in any stimulus package extended unemployment insurance for those who are losing their jobs and looking for work in our ailing economy," said a statement from Sen. Hillary Clinton, one of the two leading Democratic presidential candidates. "We need more than tax rebates and business incentives to fix our ailing economy."
Sen. Charles Schumer, D-N.Y., chairman of the Joint Economic Committee of Congress, said at a panel hearing that "any doubts that we are heading into a recession should be erased with today's employment report."
"I'm concerned that the last few years of lower-than-expected job growth will look good compared to the job shrinkage we may well see in the coming months," he added.
Testifying at the hearing, Keith Hall, the commissioner of the Bureau of Labor Statistics, agreed that the employment situation is worrisome to the overall economy.
"We have seen job losses fairly widely spread," he said. "We've had periods like this before. We don't want this to continue."
Will Fed step in again?
Still, some economists say after cutting interest rates by 1.25 percentage points in just the last two weeks, the Fed is unlikely to take any immediate action to boost the economy, even with this new sign of weakness. The central bank's policymakers will have another employment report to consider before they next meet March 18.
"I do not think this report compels the Fed to do anything," said economist Robert Brusca. "The Fed has eased a lot. Monetary policy works with a lag. The Fed knows weak data will continue for a while after its cuts. It will need to see something much weaker than this to get itself hopped up for another rate cut."
Other economists said they do expect the Fed to resume making cuts at its upcoming meetings.
"I think we're seeing some actual job loss. I'm not surprised by the number," said David Kelly, chief market strategist for JPMorgan Funds. "There is weakness in the payroll numbers and we're wobbling on the edge of recession."
"But America is not overstaffed today," he added. "That should limit job losses in the future."
Wachovia senior economist Mark Vitner said he doesn't believe the economy will fall into recession, but he conceded there is weakness in hiring. But he said it's more a matter of businesses not hiring than making steep job cuts.
"There's no question businesses are more cautious in their hiring plans," he said.
That view was echoed by Jeff Kaye, CEO of executive recruiter Kaye Bassman International.
"I don't think we're heading to layoffs other than the obvious sectors that are being pounded," he said. "But we're seeing companies on hold on hiring; they're in a wait-and-see posture to see what happens with economy."CNNMoney.com staff writer David Goldman contributed to this report
Microsoft Bids $44.6 Billion for Yahoo!
http://www.nytimes.com/2008/02/01/business/01cnd-yahoo.html?ref=technology
In related news:
From Marketwatch.com - Shares of Google Inc. (GOOG) fell 8% in premarket trading after the Internet search giant posted quarterly results that fell short of Wall Street analysts' expectations.
10:35 (Dow Jones) Deutsche Bank cuts Monster (MNST) to hold from buy, based on declines in job postings in January, increased concerns about a recession, execution risk ("management looks focused on reinvesting") and managing its sales operations. "We think the stock is likely to remain rangebound as we need to see stability in recruitment activity," firm says. Cuts price target to $27 from $47 - a level it hasn't seen since May. MNST down 3.9% at $27.50.
In related news:
From Marketwatch.com - Shares of Google Inc. (GOOG) fell 8% in premarket trading after the Internet search giant posted quarterly results that fell short of Wall Street analysts' expectations.
10:35 (Dow Jones) Deutsche Bank cuts Monster (MNST) to hold from buy, based on declines in job postings in January, increased concerns about a recession, execution risk ("management looks focused on reinvesting") and managing its sales operations. "We think the stock is likely to remain rangebound as we need to see stability in recruitment activity," firm says. Cuts price target to $27 from $47 - a level it hasn't seen since May. MNST down 3.9% at $27.50.
Next in Line for Reinvention: The Art of Selling
Consultant Ram Charan Says Focus Is All Wrong; What a Customer Needs
By PHRED DVORAKJanuary 28, 2008; Page B3
Ram Charan is known for his platinum clients and his relentless schedule. The business professor-turned-management consultant says he's worked seven days a week for 30-plus years, advising executives at the likes of General Electric Co. and Verizon Communications Inc. on such topics as improving results and execution.
In his spare time, he has written or co-written 16 books, mostly on strategy and leadership.
MAKING THE SALE
Ram Charan's tips for better sales:
• Know how the customer makes money.
• Learn the customer's decision- making process.
• Build many relationships with the customer, not just through sales.
• Focus on the customer's business needs, not product features or price.
• Show how your offerings meet customer needs.
Recently, Mr. Charan turned his attention to sales, particularly from one business to another. He doesn't like what he sees. In "What the Customer Wants You to Know," published last year by Portfolio, he argues that companies need to "reinvent" the way they sell, to focus on their customers rather than product features. Mr. Charan talked to The Wall Street Journal about the problems with sales and how to fix them. An edited transcript follows.
WSJ:Why a book on sales now?
Mr. Charan: Around 2003, I began to see companies with good strategies, good technology, good costs asking, "Why are we not getting better results?" I found many companies had focused on the back end of the business: operations, accounting, finance, overhead. But the sales force had been neglected. I got horrified.
WSJ:What was wrong?
Mr. Charan: The sales function has traditionally been about execution. Most sales people are very good at connecting with the purchasing customer. They get training to know the product. And they beat the competition on price.
Now the world has changed. Copying a product became very quick. You now have competition on the Internet to beat down prices.
It has become very hard to differentiate yourself in the eyes of the customer, for business-to-business sales. So salespeople should not sell the product any more. They should find out what the customer needs, which will be a combination of products and services and thought leadership.
WSJ:Can you explain this new approach?
Mr. Charan: Salespeople need to work backwards from what the business need of the company is. Let's say I'm going to sell you this BlackBerry. I come to you and I say, "I've done some homework on your company. I think you're going to need 1,000 BlackBerrys. And in order to make your BlackBerrys fruitful, I'm going to need some information. How many users are in selling, how many in manufacturing, how many in research, how many in finance, how many on the road?"
With that information, I can design something that is useful to them. That information is proprietary. If you don't trust me, I will not get that information. Salespeople need to learn the business of the customer. They need to learn how to ask the right questions. They need to have analytic skills to diagnose a customer's business. They need to figure out who makes the decisions in a company.
WSJ:Don't most companies do this already?
Mr. Charan: No. They say how their products will reduce customers' costs. They don't touch on improvement of revenues, margins or brand image.
At [packaging company] MeadWestvaco Corp., one sales team studied the frozen-food business of a potential customer. They looked at freezer shelves in stores, and saw there was spoilage in that customer's products, partly because of the condition of the package. Shoppers were turned off.
So they redesigned the package and pitched it to the customer. They got the business, and the customer's margins and image improved.
WSJ:How does the sales force have to change?
Mr. Charan: The old salesperson: gregarious personality, very sociable. Plays golf. Goes to ballgames. Quick to link with people. Highly motivated. Long hours. Very perceptive in reading other people. The more successful ones know how to close the deal. It's still useful.
Going forward, the salesperson must build trust with the customers' people that's deeper than before and sustained over time. You cannot design a solution without information from the customer. And if the customer does not trust you, he or she will not give you information.
WSJ:What else has to change?
Mr. Charan: In the old game, one person could do the selling. In the new game, you need a team from your company. The reason you need a team is the solution you're going to create is going to come from different parts of your company.
That means salespeople have to be good leaders, to lead their team, and also persuade the customer team. Because customers also buy in teams.
By PHRED DVORAKJanuary 28, 2008; Page B3
Ram Charan is known for his platinum clients and his relentless schedule. The business professor-turned-management consultant says he's worked seven days a week for 30-plus years, advising executives at the likes of General Electric Co. and Verizon Communications Inc. on such topics as improving results and execution.
In his spare time, he has written or co-written 16 books, mostly on strategy and leadership.
MAKING THE SALE
Ram Charan's tips for better sales:
• Know how the customer makes money.
• Learn the customer's decision- making process.
• Build many relationships with the customer, not just through sales.
• Focus on the customer's business needs, not product features or price.
• Show how your offerings meet customer needs.
Recently, Mr. Charan turned his attention to sales, particularly from one business to another. He doesn't like what he sees. In "What the Customer Wants You to Know," published last year by Portfolio, he argues that companies need to "reinvent" the way they sell, to focus on their customers rather than product features. Mr. Charan talked to The Wall Street Journal about the problems with sales and how to fix them. An edited transcript follows.
WSJ:Why a book on sales now?
Mr. Charan: Around 2003, I began to see companies with good strategies, good technology, good costs asking, "Why are we not getting better results?" I found many companies had focused on the back end of the business: operations, accounting, finance, overhead. But the sales force had been neglected. I got horrified.
WSJ:What was wrong?
Mr. Charan: The sales function has traditionally been about execution. Most sales people are very good at connecting with the purchasing customer. They get training to know the product. And they beat the competition on price.
Now the world has changed. Copying a product became very quick. You now have competition on the Internet to beat down prices.
It has become very hard to differentiate yourself in the eyes of the customer, for business-to-business sales. So salespeople should not sell the product any more. They should find out what the customer needs, which will be a combination of products and services and thought leadership.
WSJ:Can you explain this new approach?
Mr. Charan: Salespeople need to work backwards from what the business need of the company is. Let's say I'm going to sell you this BlackBerry. I come to you and I say, "I've done some homework on your company. I think you're going to need 1,000 BlackBerrys. And in order to make your BlackBerrys fruitful, I'm going to need some information. How many users are in selling, how many in manufacturing, how many in research, how many in finance, how many on the road?"
With that information, I can design something that is useful to them. That information is proprietary. If you don't trust me, I will not get that information. Salespeople need to learn the business of the customer. They need to learn how to ask the right questions. They need to have analytic skills to diagnose a customer's business. They need to figure out who makes the decisions in a company.
WSJ:Don't most companies do this already?
Mr. Charan: No. They say how their products will reduce customers' costs. They don't touch on improvement of revenues, margins or brand image.
At [packaging company] MeadWestvaco Corp., one sales team studied the frozen-food business of a potential customer. They looked at freezer shelves in stores, and saw there was spoilage in that customer's products, partly because of the condition of the package. Shoppers were turned off.
So they redesigned the package and pitched it to the customer. They got the business, and the customer's margins and image improved.
WSJ:How does the sales force have to change?
Mr. Charan: The old salesperson: gregarious personality, very sociable. Plays golf. Goes to ballgames. Quick to link with people. Highly motivated. Long hours. Very perceptive in reading other people. The more successful ones know how to close the deal. It's still useful.
Going forward, the salesperson must build trust with the customers' people that's deeper than before and sustained over time. You cannot design a solution without information from the customer. And if the customer does not trust you, he or she will not give you information.
WSJ:What else has to change?
Mr. Charan: In the old game, one person could do the selling. In the new game, you need a team from your company. The reason you need a team is the solution you're going to create is going to come from different parts of your company.
That means salespeople have to be good leaders, to lead their team, and also persuade the customer team. Because customers also buy in teams.
They Ponder Layoffs, But Executives Still Face Gaps In Talent
Companies typically shed talent rather than search for new or additional employees during periods of economic slowdowns. That could change, though, as hiring managers prepare themselves for an uncertain year.
Even as they contemplate layoffs, many companies also are hunting for new hires to fill management gaps.
One reason for the hunts: Companies haven't been grooming and training enough employees for promotions and now have a mismatch of talent for open positions. In the past, top managers would plan far ahead to fill a position. Today, every vacancy seems to be treated as unique -- and even as a surprise, despite the long-term trend of frequent job changes by employees.
"Workplaces are filled with frustrated people who want to advance but haven't gotten training or broad enough experience," says Peter Cappelli, a management professor at the Wharton School and director of Wharton's Center for Human Resources. "In coming months, we'll likely see companies laying off employees but also crying that they can't find people with the skills they need."
Instead of complaining, they should acknowledge that they've dropped the ball on talent development. Some 60% of companies have no succession planning of any kind, according to a survey by the Society of Human Resources Management of several thousand of its members.
There are newly named outside chief executives at financial-services giant Merrill Lynch, telecommunications firm Sprint Nextel and retailer Zale, and CEO searches are under way at H&R Block, Marsh & McLennan and Children's Place. Other companies are looking outside their ranks for top finance executives or managers who can oversee business units.
Nearly half of 20,000 employees surveyed at 100 large global companies by YSC, a London-based corporate-psychology consultant, said they don't receive enough feedback from their managers to help them improve their performance. At one large financial-services company that YSC worked with, a senior executive talked with his eight staffers about their performance just once a year, says YSC director Miriam Javitch.
Employees who lack guidance and opportunities to advance are more likely to quit and look for jobs elsewhere, even during shaky economic times when as the last hired they may be the first fired. A marketing manager at a New York consumer-products company plans to make a lateral move to another employer where he thinks he has more chance of getting promoted in a year or two. In three years at his current job, "my boss has never talked to me about what job I might do next, or encouraged me to learn anything new," he says.
No manager, of course, has time for constant hand-holding, but that isn't what is required to nurture future managers. The most important need is to identify which subordinates want to advance and keep them growing by rotating them through jobs -- trusting that if they've done one thing well, they'll be able to learn something entirely new.
Bob Zito, communications chief, Bristol-Myers Squibb, encourages the 250 employees he supervises to raise their hands when openings occur and change jobs frequently to get more experience. He recently had an employee from Singapore spend several months at the company's New Jersey office and suggested that an employee in a corporate staff position swap jobs with someone who had spent several years working in the pharmaceutical business.
"I want to keep people excited -- and to be nimble and grow we need lots of employees who have had lots of different experiences," says Mr. Zito. He thinks managers who claim they're too frenzied to groom employees are misusing their time. "The more I delegate to employees and ask them to stretch, the more I have time to work with them."
Jeff Henderson, finance chief for Cardinal Health, Dublin, Ohio, last year reshuffled more than 20% of his top 230 finance managers within the department to create new learning opportunities for them, which resulted in improved performance and strengthened loyalties. He does succession planning for his staff twice a year, "looking at the entire talent pool and seeing who is best for what job," he says.
Until four years ago, Cardinal was a holding company with disparate units and little employee mobility. Now, as one integrated operating company, executives want employees to shed their "silo-based mentality" and be willing to move between staff and line jobs in various departments and at different locations.
"If we go elsewhere to find talent whenever openings occur, we're telling our people to be free agents, too, when we need their loyalty," says Mr. Henderson.
Cardinal still has had to search outside to fill some key spots, such as the head of its health-care-supply unit. But this should change as veterans advance up the ranks.
Next to the stock market, what CEOs talk about most is their lack of bench strength, says executive recruiter Peter Crist of Crist Associates. "Their inefficiency at succession planning is keeping me very busy," he says.
Email me at inthelead@wsj.com3. Join a discussion about guidance and training on the job, at WSJ.com/Forums4. To see past columns, go to WSJ.Com/Careers5.
Even as they contemplate layoffs, many companies also are hunting for new hires to fill management gaps.
One reason for the hunts: Companies haven't been grooming and training enough employees for promotions and now have a mismatch of talent for open positions. In the past, top managers would plan far ahead to fill a position. Today, every vacancy seems to be treated as unique -- and even as a surprise, despite the long-term trend of frequent job changes by employees.
"Workplaces are filled with frustrated people who want to advance but haven't gotten training or broad enough experience," says Peter Cappelli, a management professor at the Wharton School and director of Wharton's Center for Human Resources. "In coming months, we'll likely see companies laying off employees but also crying that they can't find people with the skills they need."
Instead of complaining, they should acknowledge that they've dropped the ball on talent development. Some 60% of companies have no succession planning of any kind, according to a survey by the Society of Human Resources Management of several thousand of its members.
There are newly named outside chief executives at financial-services giant Merrill Lynch, telecommunications firm Sprint Nextel and retailer Zale, and CEO searches are under way at H&R Block, Marsh & McLennan and Children's Place. Other companies are looking outside their ranks for top finance executives or managers who can oversee business units.
Nearly half of 20,000 employees surveyed at 100 large global companies by YSC, a London-based corporate-psychology consultant, said they don't receive enough feedback from their managers to help them improve their performance. At one large financial-services company that YSC worked with, a senior executive talked with his eight staffers about their performance just once a year, says YSC director Miriam Javitch.
Employees who lack guidance and opportunities to advance are more likely to quit and look for jobs elsewhere, even during shaky economic times when as the last hired they may be the first fired. A marketing manager at a New York consumer-products company plans to make a lateral move to another employer where he thinks he has more chance of getting promoted in a year or two. In three years at his current job, "my boss has never talked to me about what job I might do next, or encouraged me to learn anything new," he says.
No manager, of course, has time for constant hand-holding, but that isn't what is required to nurture future managers. The most important need is to identify which subordinates want to advance and keep them growing by rotating them through jobs -- trusting that if they've done one thing well, they'll be able to learn something entirely new.
Bob Zito, communications chief, Bristol-Myers Squibb, encourages the 250 employees he supervises to raise their hands when openings occur and change jobs frequently to get more experience. He recently had an employee from Singapore spend several months at the company's New Jersey office and suggested that an employee in a corporate staff position swap jobs with someone who had spent several years working in the pharmaceutical business.
"I want to keep people excited -- and to be nimble and grow we need lots of employees who have had lots of different experiences," says Mr. Zito. He thinks managers who claim they're too frenzied to groom employees are misusing their time. "The more I delegate to employees and ask them to stretch, the more I have time to work with them."
Jeff Henderson, finance chief for Cardinal Health, Dublin, Ohio, last year reshuffled more than 20% of his top 230 finance managers within the department to create new learning opportunities for them, which resulted in improved performance and strengthened loyalties. He does succession planning for his staff twice a year, "looking at the entire talent pool and seeing who is best for what job," he says.
Until four years ago, Cardinal was a holding company with disparate units and little employee mobility. Now, as one integrated operating company, executives want employees to shed their "silo-based mentality" and be willing to move between staff and line jobs in various departments and at different locations.
"If we go elsewhere to find talent whenever openings occur, we're telling our people to be free agents, too, when we need their loyalty," says Mr. Henderson.
Cardinal still has had to search outside to fill some key spots, such as the head of its health-care-supply unit. But this should change as veterans advance up the ranks.
Next to the stock market, what CEOs talk about most is their lack of bench strength, says executive recruiter Peter Crist of Crist Associates. "Their inefficiency at succession planning is keeping me very busy," he says.
Email me at inthelead@wsj.com3. Join a discussion about guidance and training on the job, at WSJ.com/Forums4. To see past columns, go to WSJ.Com/Careers5.
Subscribe to:
Posts (Atom)
