Upbeat and Downstairs: Home of Daryl C. Donatelli
Challenge Your Imagination…
Mmm, there’s nothing like the smell of capitalism
Absolutely brilliant:
The latest development in the saga between Bank of America CEO Ken Lewis and the United States Treasury/Federal Reserve brings up yet another classic example of the Knowing-Doing Gap gone awry. I’ve been hot on this topic for a few weeks, following a recent lecture by Professor Jeffrey Pfeffer on evidence-based management. He writes:
“Fear helps create knowing-doing gaps because acting on one’s knowledge requires that a person believe he or she will not be punished for doing so—that taking risks based on new information and insight will be rewarded, not punished. When people fear for their jobs, their futures, or even for their self-esteem, it is unlikely that they will feel secure enough to do anything but what they have done in the past. Fear will cause them to repeat past mistakes and re-create past problems, even when they know better ways of doing the work.”
— Jeffrey Pfeffer and Robert Sutton
Mr. Lewis embodies Prof. Pfeffer’s criticism of management almost to the word. His decisions were short-sighted, and put his fear of his employment (and of the ultimate loss of a deal) far ahead of what would be a good, sound business decision. I would argue that his transaction with Merrill Lynch’s CEO John Thain was an even further example of Mr. Lewis trying to be the hero, versus trying to grow the business in an appropriate way. Frontline ran a special about Ken Lewis and his appetite for deals, and they draw a conclusion that supports Prof. Pfeffer’s theory.
Apple’s iPhone 3G launched today in 21 countries, at precisely 8:00am in each local time zone. The logistics of pulling off such an event are absolutely insane to ponder, and preliminary market reports of activation issues are being trumped now by stories of out-of-stock warnings around the world. Hong Kong has a history of literally maniacal mob scenes when a major product is introduced, so Apple took no chances and hired guards in kevlar vests and helmets with shotguns. For a phone.
This is the point where I stick my tongue out at the people who told me Apple was going bankrupt in 1997 and wouldn’t live to see 1998!
Nielsen BuzzMetrics, the Internet “conversation” tracker, released some stats on iPhone 3G’s online presence, which, admittedly, are not that interesting to view.
However, it appears the peak in the online buzz came a few weeks before launch, specifically between June 9 and 13, the time of the Apple Worldwide Developers Conference during which Mr. Jobs detailed the new iPhone features and specs. This is what conveys a true latent demand in the smartphone market, and I wish Apple all the best of success, though it appears I won’t need to:
“iPhone buzz is through the roof. One out of every 100 new blog posts is about the iPhone – more than Barack Obama or John McCain. And while the blogosphere may pay special attention to new technology, this buzz underscores the important role the iPhone is playing in raising awareness of and interest in multimedia phones,” said Nic Covey, Director of Insights, Nielsen Mobile.
U.S. stock markets have been off to a very rough start in 2008, with all of the major indices — the Dow, Nasdaq, S&P 500, and Russell 2000 — significantly below their record closing values in October, 2007.
As a distraction from logging in to my brokerage account and staring at red down arrows, I wanted to pass along a little piece written this afternoon by David Gaffen at The Wall Street Journal detailing just how far the markets could fall:
By now the Standard & Poor’s 500-stock index has achieved something that hadn’t happened since 2002 — it is sitting at levels below the previous year’s lowest closing level, which some technicians view as a bearish signal.
The S&P 500’s lowest close in 2007 was 1374.12; the index finished below that level yesterday, and today, barring a miraculous turnaround, it will leave stocks below the intraday low in 2007, which was 1363.98. Todd Salamone of Schaeffer’s Investment Research says the action in the S&P is “an indication of a change in the trend,” noting that it hasn’t happened since 2002.
The Dow isn’t quite there — 2007’s closing low was 12050.41, and the index was currently traded at 12318. But analysts at Asbury Research see other technical problems on the Dow, noting that the recent closes below 12518 suggest “a larger, more sustainable top is in place in the Dow at the October 2007 high.”
They’re putting a downside target on the Dow of about 11,025, which suggests this is “the beginning of a bear market, not just a correction within the 2002 cyclical uptrend.”