Just in Case it Matters to You
Weekly Report 13-33
- “IT’S EASIER TO GET INTO BUSINESS THAN IT IS TO GET OUT… Private company leaders and managers usually fail to focus on how to create sustainable value, and don’t know how to align Company capabilities or position it to appeal to targeted investors or acquirers… They often fall into a trap of working in the business but not on the business, continually failing to ask the question ‘what if?’ and to properly plan for the contingencies they might face.” Meanwhile, both external and internal challenges – in setting strategy, dealing with people & systems, technology impacts, business economics & finances, etc. – require critical and informed decisions which are outside the priorities or capabilities of owners or managers fighting for short-term survival. Too often the results are decisions “made without a clear view of their impact on future value” which contribute to the evaporation of working capital and even the demise of the business. DCG is your ‘go to’ team for support. [ADVISORY BOARDS – 2013]
- “MILLENNIALS ARE ENTERING THE WORKFORCE DURING A ‘LOST DECADE.’ Since 2000 average wages have dropped for college grads,” according to Economic Policy Institute. And a recent Pew Research study found that nearly 22 million Millennial kids – more than one in three – are now living with their parents, the highest percentage in four decades; for those under age 25, it’s 56% living at home. Over a third don’t have jobs; when ‘underemployment’ is considered, the statistic rises to around half. And the stats continue to worsen. [HUFFINGTON POST – Aug 2, 13]
• Meanwhile “IRRATIONAL EXUBERANCE IS BACK…a collective insanity sweeping through millions of investors search-ing for a ‘new, new normal’… The explosive rise in home prices in the mid-2000s set us up for an epic fall… and so it is again today. The long bull rally that started March 2009 might last a while longer, or just impulsively terminate without warning tomorrow. Either way, we’re moving headlong into the third shocker of the 21st century.” [THE WEEK – Aug 9, 13]
- AS CARS & TRUCKS ARE INCREASINGLY AUTOMATED AND INTERNET-CONNECTED, they’ve become a “hackable network of computers… accessible through WIFI cellular connections (like OnStar), Bluetooth bugs, or malicious audio files on a CD in the stereo system.” Funded by a grant from DARPA (“the madscientist research arm of the Pentagon”), latest research found ways to hijack basic functions with a few keystrokes – including engine acceleration, braking, power steering, speedometer & gas gauge readings, seatbelt hold, even blasting the horn. With annual revenue from vehicle wireless devices projected to reach $25 billion in the next decade and all “potentially vulnerable,” the need for security is yet another major sector of technology risk. [FORBES – Aug 12, 13]
- ONCE THE “RICHEST CITY IN THE COUNTRY AND PERHAPS THE WORLD,” Detroit is now the poster child for municipal bankruptcy. The exportation of its auto industry resulted in massive unemployment, shrinking tax revenue, white flight, over 60% population loss in six decades, corruption and massive decay – currently some 78,000 abandoned structures along with over 6,000 empty lots. Detroit’s “crushing debt and unfunded & unsustainable retiree benefits (a $3.5 billion liability)… are at the heart of what many experts believe is a coming municipal finance crisis in the U.S.” Unions are much of the problem. “While it’s painful, and sometimes tragic for workers to contemplate benefit cuts,” the continual union ‘hard line’ pushes cities into an untenable position; and “a dying city is in no position to pay anyone.” Moreover, the bankruptcy process which pits secured creditors, investors and pensioners against one another is incredibly costly and messy. Stockton CA filed two years ago and is “still fighting to get creditors to accept lower payments, creating a toxic political environment that makes it hard to focus on new growth issues.” [TIME – Aug 5, 13]
- THOUGHTS FOR THE WEEK: “Have no fear of perfection – you’ll never reach it.” – Salvador Dali
“To travel is to discover that everybody is wrong. The philosophies and civilizations which seem, at a distance, so superior to those current at home, all prove on a close inspection to be in their own way just as hopelessly imperfect.” – Aldous Huxley “What odd thing tourism is. You fly off to a strange land, eagerly abandoning all the comforts of home, and then expend vast quantities of time & money in a largely futile attempt to recapture the comforts that you wouldn’t have lost if you hadn’t left home in the first place.” – Bill Bryson