Just in Case it Matters to You
Weekly Report 20-02
- 2/3 OF FAMILY-OWNED BUSINESSES NEVER MAKE IT TO THE SECOND GENERATION (and 85% are gone by the 3rd) – mostly because they are seldom structured or managed effectively. Controlling owners find it uncomfortable to balance multiple roles; family members have expectations, envy, ego, insecurities or entitlement issues; communication is often stifled by emotional entanglements. Decades of DCG experience suggest several critical areas of conflict: (1) Job titles unsupported by clear responsibility, accountability & authority; (2) Compensation levels unsupported by market prices with a realistic performance evaluation process; (3) Training programs to develop next-generation management & leadership skills; (4) Communication procedures which clarify operating principles, culture and relationships; (5) Protective mechanisms to mediate & accommodate stakeholders with different expectations, and to protect implications from divorce, death, mental incapacity, etc. When mixing family & business without effective structure for separating and clarifying these crucial and often incompatible areas, disaster can ensue. Call for courtesy consultation before your reality check bounces!
- ANOTHER CRITICAL FACTOR IS TRAINING PROGRAMS FOR RANK & FILE EMPLOYEES. More than a third of work skills needed for job success, regardless of industry, are now changing. ‘Upskilling’ programs are underway at a growing number of large companies, but not at emerging or mid-size businesses – programs to help employees “identify gaps in their personal knowledge & skill sets, so they can focus on the technical skills to stay competitive.” Effective programs need structure: (1) to teach relevant skills which can currently facilitate productivity (as well as motivation & retention), like shadowing and/or job rotation; (2) for workers to learn ‘on the clock’ instead of overwhelming their regular responsibilities, or requiring them to forfeit work/life balance time; (3) to incentivize learning and teamwork. DCG can help. [QUARTZ.COM – 12/9/19]
- “FORECASTERS PUT ODDS ON EVENTS BECAUSE WORDS LIKE ‘PROBABILITY’ AND ‘LIKELY’ ARE INTERPRETED VERY DIFFERENTLY by different people. But numbers mean nothing without confidence… So the more uncertain people are in their judgements, the more likely they are to hedge their bets – and act as if they are facing known odds closer to 50:50 than might otherwise seem rational… ‘Cognitive Uncertainty’ – aka lack of confidence (whether concern with failing memory or just unsure of personal preference) – results in choices depending less on what they see or hear than on a ‘mental default’ to equal probabilities… Even with decision-making under known risks, like gambling at a fair slot machine, there is a tendency to compress odds to boundaries of 0% and 100% – i.e. 50:50.” [ECONOMIST – 12/14/19]
- PUBLIC COMPANIES ARE USING INFORMATION “HIDDEN IN FINE PRINT” TO MANIPULATE EARNINGS. According to a new study by Harvard Business School and MIT Sloan, accounting maneuvers to adjust ‘non-operating’ income, involving unusual or one-time gains, are increasingly “buried in footnotes and/or management discussions sections of regulatory filings, and have consistently risen over two decades, in part driven by manager bias to meet or just beat consensus earnings forecasts… which market participants are slow to take into account when buying/selling securities… and can impact monthly excess returns by over 50 basis-points.” Stock players beware. [INSTITUTIONAL INVESTOR – 11/27/19]
- MOST COMPANIES ARE UNAWARE THAT CYBERCRIME INSURANCE POLICIES DO NOT COVER MOST LOSSES FROM AN ATTACK. Policies are generally limited to expenses related to restoring data & equipment, litigation & customer notification costs. But other operational and intangible costs, including lost productivity & revenue from disruption, degraded reputation & brand, market share & price drop, or regulatory compliance problems, are not covered. “The more that businesses depend upon data & technology, with supply chains and infrastructure to facilities & data critical to productivity and profitability, the more exposed to cyber-induced business interruption they become… As essential as cyber insurance is, survey of top financial execs indicates they may be deriving a false sense of security from insurance policies.” [CFO – 12/19]
- THOUGHTS FOR THE WEEK: “Being ignorant is not so much a shame as being unwilling to learn.” – Benjamin Franklin
HOW is this possible, if not ‘magic’ ???? https://www.youtube.com/embed/DRmD5l37Q7k
A reminder: It is illegal to drive with a Blood Alcohol Content of .08% or more (and .01% if under 21). One drink is generally equivalent to 1.5 oz. liquor, 12 oz. beer, or 5 oz. wine. But for each 40 minutes that lapse between drinks, alcohol content reduces by roughly .01%. Based on Body Weight, watch what happens as six drinks are consumed too rapidly: