Ethics almost irrelevant?

August 19, 2013

By James Pilant via Pliant’s Business Ethics Blog   Article

Why unethical conduct in business is so common at this time in our history? Why is business ethics almost irrelevant?

“How did doing financial speculation amounting to little more than gambling become respectable? How did the idea of a responsibility to the other citizens of a nation become amusing to the elites?

There are several factors. The first was the advent of the baby boomers to power and authority replacing the Depression and the World War Two Generations. …

The second factor … is the advent of the Chicago School of Economics and the doctrines of Milton Friedman. …

…the doctrine of “social responsibility” taken seriously would extend the scope of the political mechanism to every human activity. It does not differ in philosophy from the most explicitly collectivist doctrine. It differs only by professing to believe that collectivist ends can be attained without collectivist means. …

The third element is the gradually increasing wave of deregulation …

The fourth element … Hostile takeovers and corporate raiding become regular parts of the business news. The basic significance of this is that it is a war. A war fought between manufacturing and finance, with manufacturing losing at every turn. …

Now, let’s combine them. Those Americans familiar with the pain of the results pass on the reins of power to a new generation. The Chicago School of Economics will provide the philosophical basis for discarding societal responsibility. The government reacts with deregulation which makes it exceptionally difficult to re-regulate industries. The financial industry begins destroying manufacturing in its search for profits.”


Blueberry pancakes and battleships

May 27, 2013

By Seth Godin via sethgodin.typepad.com   Article

“The typical industrial-era organization is like a battleship. Hundreds or thousands of people onboard, …  most of them aren’t actually directly responsible for the work that we hired the battleship to do. … The battleship can go far, with impact, and change the course of history. … it’s designed to survive with people who are merely good at what they do.

The typical professional services company, on the other hand, is a lot like a blueberry pancake. While there’s an essential support team, the firm is all about blueberries working in parallel. …  As the firm gets bigger, it doesn’t get thicker. You don’t make a better pancake by making a thicker one. You make a better pancake by hiring ever better blueberries …

Apple is now a battleship. Most of the tens of thousands of people who work there have a line job, selling, building, fixing or interacting. Only a few are dreaming up something that you can’t even imagine.

Your favorite record label, though, ought to be a blueberry pancake. Each musical group is mostly alone, figuring out something that just might work. The goal isn’t to lock and repeat and scale. …

If you want to make your battleship work better, be really clear about defining the mission, the tactics, the chain of command and most of all, precisely what you measure from each person on the team.

Your pancake, on the other hand, gives up swing weight and firepower and instead gets flexibility and the possiblity of non-fatal failure (and game-changing magic).

Both work. The problem kicks in when a successful pancake thinks its future is in the battleship business. Or when battleships are asked to dance.”


The $1.80 beer lesson

May 20, 2013

By:  via fastcompany.com   Article

The Invaluable $1.80 Beer Lesson on Selling Products and Buying Habits

The great bear experiment

People were offered two beers–a premium one at $2.50 and a bargain beer for $1.80. … About 80 percent chose the more expensive one.

In the next experiment, an even cheaper option joined the first two–a beer for just $1.60. … 80 percent of people nabbed what became the middle option–at $1.80–and the rest bought the $2.50 offering.

Then the third take happened: the $1.60 beer was switched out for one of those ultra-premium offerings at a cool $3.40. … most people chose the $2.50 option, relatively few chose the low-cost $1.80 option, and about 10 percent nabbed the most expensive option.

…  Shifting the options influenced buyer behavior. The experiment confirms an old sales heuristic: if you offer different price points, people will choose between the plans rather than whether to buy the product or not. …

… The most obvious application would be to incorporate the three-way price-plan into your product … use the strategy on your friends and colleagues. … say you want to grab lunch with your work BFF but you don’t want to boss them into going to your favorite Cuban place–you’d rather allow them to arrive to that decision on their own.

… suggest three lunch spots: cheap and average Italian, reasonably priced and conveniently located Cuban, or distant and expensive Chinese. So instead of contemplating the worthiness of Cuban in and of itself, your BFF is comparing it to the crap Italian and the too-fancy Chinese, which should tip the lunch-scales in your favor–if that beer experiment was any indication.”


Ice cream

March 11, 2013

Freemium


The horrible shootings

February 4, 2013

By  via Manufacturing Leadership Center   Article

Shareholders versus Stakeholders

“The horrible shootings in Connecticut have set off another round of debates over the fundamental goals of a business – pitting financial gain against social responsibility. … Lean proponents believe that fairly, even well, compensated employees; suppliers sure they will be dealt with fairly if they invest in the long term health of their customers; customers who receive the most for their money; and communities living with assurance that local employers are long term residents will all go beyond the call of duty to assure the success of the business.

The alternative is the traditional economic view – that labor (the employees) and capital (the stockholders) are engaged in a zero sum battle with each other – that one’s gain is the other’s loss; that relationships with both suppliers and customers should be adversarial – again a sort of zero sum approach that a nickel negotiated away from a supplier or a customer is a nickel gained for the stockholder …

The difference in views is very much a function of the time frame.  The holistic, lean approach is a proven winner, but is a long term winner.  Optimizing long term shareholder value often means sub-optimizing short term shareholder value.  In publicly traded companies the long term view just isn’t in the cards.  The costs of dumping an investment in  one company and putting the money into another are just too low and the whole thing is structured to enable the trillions of dollars in the markets to lurch from one company to another in a continual quest for the best short term returns.”


The Sticky Customer Trap

January 28, 2013

By  via Inc.   Article

“Most people tend to think revenue is good, and growing revenue is even better–a completely understandable mindset. Revenue is probably the most objective measure in any business, because it tells you how much customers are paying for your products or services. Therefore, it’s easy to equate revenue growth to creating customer value.

There’s one instance, however, that can lull an organization into complacency. We call it the sticky customer trap. …

How the Trap is Set

How does this happen? … There’s an ongoing need for the service, so the customer continues to ask for support and continues to pay its bills. No problem, right? You are creating customer value.

The problem is that these services are sticky. Once the customer chooses you as their vendor, there is a high cost for them switching to another vendor. They may become unhappy with your service, but in order to switch they need to find someone else, believe someone else is not as bad as you, and go through the cost and effort of moving to the new vendor.

As the vendor, your organization tends to gravitate in the other direction. You see revenue coming in month after month and praise the team for their great work. The feeling of comfort at that customer causes your organization to shift focus toward new customers, which can further degrade existing customer value. …

How to Avoid the Trap ….”


Industrialists vs. the rest of us

December 10, 2012

Via Seth’s Blog by Seth Godin   Article

“Industrialists are not capitalists. Capitalists take risks. They see an opportunity, an unmet need, and then they bring resources to bear to solve the problem and make a profit. Industrialists seek stability instead.

Industrialists work to take working systems and polish them, insulate them from risk, maximize productivity and extract the maximum amount of profit. Much of society’s wealth is due to the relentless march of productivity created by single-minded industrialists, particularly those that turned nascent industries (as Henry Ford did with cars) into efficient engines of profit.

Industrialists don’t mind government regulations if they write them, don’t particularly like competition or creativity or change. They are maximizers of the existing status quo.

Of course, they can’t abide humanity when it comes to work, because humanity is inconsistent and interested in things other than the last zero. The best employee is a robot that can be plugged into a wall.

The stock market rewards the single-minded industrialist with short-term applause and then the relentless desire for ever more of the same growth and productivity that got them applause yesterday.

Today’s industrialists define our economy, but they offer very little promise for tomorrow.”


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