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On the heels of the European Central Bank announcing its massive stimulus program, an OECD report questions whether this is sufficient for Europe (and Japan!). The report emphasizes what critics have long argued: structural reforms to encourage trade, investment, and small and medium enterprises are essential to European economic recovery. The description of the challenge is striking given that this is Europe, not a developing nation:
One reason for the reluctance of companies to invest in infrastructure and other long-term or higher-risk projects is the low expected private returns. … In addition, poor governance, including regulations and red tape, bribery and corruption, unclear property rights and long judicial processes in the event of disputes, bid rigging and biased procurement processes make infrastructure investment unattractive in many countries.
With so many other issues occupying Washington today, the progress of Obamacare has been overshadowed. The issue garnered only passing mentions in the State of the Union. Megan McArdle, however, takes stock and offers an unvarnished look one year in:
What have we learned so far? The answer is “less than you’d think.” Here’s what we do know so far. There have been about 7.8 million confirmed enrollments or renewals in qualified health plans. Vermont is not going to have single payer. More insurers are entering many markets, but some insurers have already run into trouble. Data on the uninsured is somewhat scarce, but my best guess, based on the Gallup numbers, is that about 4 percent of the population has gotten insured since Obamacare started, or roughly 10 million to 12 million people.
More emphasis on people and purpose, finds Deloitte’s 2015 Millennial survey. One surprising takeaway: Most young workers (73%) think business has a positive overall impact, but they are less convinced at the leadership level:
75% of Millennials agreed that leaders focus on their own agenda rather than considering the wider society.
Making these societal inroads may not require extensive planning, as Starbucks CEO Howard Shultz recently demonstrated. Amid heightened racial tensions last month, Schultz called an “impromptu forum” that was well-received and worth repeating, says his internal memo to partners.
There was no planning and I did not announce the meeting’s topic. All I knew was that we needed to come together, in a safe space, and have a conversation about what was happening in our nation.
Timely Harvard Business Review piece by Intuit CEO Brad Smith echoes some themes on design thinking. Smith details Intuit’s progress in his ambitious quest to make design a core competency. For Smith, part of this means making design a “team sport:”
We asked people in the finance department to consider how easy it is to submit a purchase order and whether that process could be streamlined. In HR we talked about the overall design of the job application and interview process-from the time candidates first encounter the employment section of our website right up to the moment someone is hired.
A new book on the rise and decline of Yahoo! garnered heavy press for its scrutiny of CEO Marissa Mayer’s management style.
More interesting, particularly on Mayer’s approach to performance reviews, is this piece by Chris Yeh, coauthor of The Alliance. No fan of stack ranking, Yeh details “a more productive” alternative while sympathizing with the challenges Mayer faces.
She needed to shrink the organization and get rid of underperformers. Stack ranking gave her a simple and scalable tool to accomplish those objectives. … In the case of Yahoo, the benefits of stack ranking may have outweighed its negatives, at least in the short term.
Last spring at G100, Don Gogel of Clayton, Dubilier, and Rice and former GE Energy CEO John Krenicki helped us explore what private equity can teach public companies. A bullish op-ed by former Aetna CEO Ron Williams takes this conversation further, describing lessons from his transition to CD&R advisor and encouraging other business executives to make the same move.
[Baby boomer executives] like me, they’ll only be retiring from corporations, not from work and not from value creation. Given their numbers, if they enter private equity, their impact could be transformative. And if you remember that the leadership cohort includes not just the current Fortune 500 leadership but their successors, the scale of the opportunity becomes fully apparent: a steady, sustainable flow of battle-hardened executives who can help fuel growth, not just for individual companies but for the entire U.S. economy.
Increasingly CEOs, argues Salesforce.com CEO Marc Benioff in this brief Fortune video interview that explains how the CMO role is changing. Benioff says:
The CEO is now in charge of the customer relationship. If you are a CEO and you are not in charge of the customer relationship, you are going to rapidly find out that you are.
How will marketing continue to evolve? More companies will tap the power of strategic narratives, one of several astute observations from an Economist Intelligence Unit interview with John Hagel, chairman of Deloitte’s Center for the Edge. He says:
[Executives] often have this reaction, “Oh, we have a narrative. We came from humble beginnings. We overcame incredible challenges. We did awesome things. And our story is open-ended, because who knows what kinds of awesome things are yet to come?” But the problem with that narrative, of course, is it’s not about the people you’re trying to reach.
That upbeat view comes from Andreessen Horowitz cofounder and prolific Twitter poster Marc Andreessen. His recent “tweetstorm” argues the slowed economy has more to do with an “oversupply of capital” relative to viable investments, a byproduct of the developing world’s poor business climate.
Andreessen may overlook some risks, according to this balanced response from former US Treasury Secretary Larry Summers, a proponent of secular stagnation:
[We] agree that we are headed into a period of soft real interest rates, where there will be more money available than great deals. … The danger which I think is very real is that the zero lower bound on nominal rates will prevent the attainment of full employment as desired investment falls short of desired saving. A related danger is that the very low interest rates will encourage risk-taking and asset price inflation in ways that will ultimately give rise to financial instability.
The New Statesman has opened up its archives to reproduce a few extraordinary pieces on Winston Churchill, including this interview prior to World War II. In the current moment, his clarity about war and peace is powerful:
The New Statesman: One point people are especially afraid of is that free criticism in Parliament and in the press may be sacrificed. The totalitarian states, it is said, are regimented, organised and unhampered, as the Prime Minister suggested the other day, by critics of the Government “who foul their own nest.”
Churchill: Criticism may not be agreeable, but it is necessary. It fulfills the same function as pain in the human body; it calls attention to the development of an unhealthy state of things. If it is heeded in time, danger may be averted; if it is suppressed, a fatal distemper may develop.
A new book by Harvard Professor Cass Sunstein cites important research on team performance that suggests collective IQ, dubbed “Factor C,” trumps Myers-Briggs as a predictor of success. From an excerpt of Wiser: Getting Beyond Groupthink to Make Groups Smarter:
Wise groups should devote real attention to social abilities, including the capacities both to participate and to listen, in selecting personnel and in devising social norms. A person’s preference to work on teams, especially when the preference is linked to social skills, is a good predictor-as is the ability to read other people’s emotional states.