Tag Archives: accountability

Security Ideas for Strategic Planning

Was just reading interesting article on protective security measures by Scott Stewart in Stratfor. Turns out there are many similarities to Strategic Planning.

Author was in business of providing protective services to government officials, religious figures, royalty, business executives and ultra luxury individuals.

Professional protective security people certainly understand weapons and self defense. They realize that if they have to rely on these they actually have failed to do their job. True protective service entails anticipating situations and being prepared for them in advance to avoid confrontations. When confrontation is probable, goal is to structure confrontation on terms the protective service experts dictate.

Action is always faster than reaction. Just watch a football game. Proactive approaches involve “excellent situational awareness, thorough logistics planning, good security assessments, careful trip and individual site security advances, liaisons with counterparts and strict operational security. Protection teams can also employ powerful tools such as protective intelligence investigations, threat and psychological assessments of people with an unusual interest in the protectee, and countersurveillance detection teams.”

Leaders use the same approach when doing their strategic planning, whether it’s to address an emergency or a surprise in business, or to do the annual strategic plan, or long term plan based on business outlooks years out.

It’s already June, are you hitting your strategic plan for first half of year? What adjustments are necessary for second half of 2016? What are your plans for 2017 if economy holds strong? Starts to soften? Either nationally or just in your market or,selective market segments?

What’s Important to You?

World is in different place than ever before. That’s true with every generation over the history of time. Ah, but do you know what pitfalls are this time? Have you taken steps to minimize effect of disasters, natural or government induced?

What’s different this time?   Most countries are broke.

So what are most countries doing? And why do you care?

They are relying on printing presses creating a rapidly expanding money supply.  Historically this has happened to many countries at one time or another. We all know the boom bust times in various South American countries.

This time it’s happening at the same time to most industrialized countries at the same time. Think China, Japan, Great Britain, US, India, almost all of Europe and Africa. Governments are increasingly tied to each other in the ways they exchange money and honor currencies.

Japan and China own trillions of the US debt. Countries have huge amounts of actual US dollars. That means re-pegging the value of US dollar won’t work. In past we were tied to gold standard. That would no work in US this time around. Countries that hold trillions of dollars outside the US could still sell the currency for any amount they wanted and US could not stop it.

Back in 2009 US public and private dept was in neighborhood of $55 trillion. That debt had significant impact on US economy. Today, US public and private debt has climbed to $65 trillion. Total US debt is up 150% since 2000. Additionally rest of world has added another $57 trillion in public and private debt.

This is referred to as “hot money” lending. But does it matter? McKinsey points out that debt, around the world, is outpacing economic growth. When economic growth can’t finance all these loans, only governments are willing to step into the breach.

This debt can only be paid off in 3 ways:

-Paid off by the people, businesses, and countries that took on the debt.
-Inflation
-Declaring the debt null and void…destroying relationships with those who provided the money in the first place. This has been used by many countries over the history of the world…but never by a number of countries in a very short period of time. No one knows the effect if several countries started down this path.

Federal Reserve Richmond, VA branch recently reported that 61% of all liabilities in US are now guaranteed by the government, implicitly or explicitly. In 1999 the percentage was 45% (mostly Fannie Mae and Freddie Mac). Today more and more of our financial institutions rely on the government to access credit.

Unfortunately, government guarantees are not shown on any government balance sheet…in US or elsewhere in the world. Governments are relying on massive currency and interest rate manipulation to fund themselves. World has never experienced anything like this by the major economic powers of the world.

Sooner or later this bubble will pop, like many others have over the years. But when?

Nobody knows. But what it means for your personal wealth is known. The biggest threat to your wealth isn’t a stock market crash. Instead it’s from confiscation and/or devaluation by our government. Think Greece last year that took 25% of savings from citizens bank accounts.

In the 1930’s people and companies suffered massive losses. But the actual wealth didn’t disappear. Wealth transferred from creditors to lenders. This time around we will have the above, but will also have major collapse in governments politically. The US government has pledged a large amount of the wealth of the citizens to other people…through all kinds of government programs. We are all familiar with Detroit bankruptcy. That will occur within America and many other countries…within a few years.  What’s a few years? Again, no one knows for sure, but within 10-20 years seems realistic.

Once inflation takes off it can have devastating effects quickly. Think back to the Carter years when inflation in US hit 20%.

US, and most countries of the world can’t sustain government spending that is vastly outstripping tax revenues coming in. Sooner or later the piper has to be paid.

Previously the world would have a 1930’s situation where loans would be called. Difference then and now? Governments were not the primary financiers of the world debt.  Banks and financial institutions had the primary role.  If government can’t pay all the people that have been promised money there will be riots on massive scale.

So what can individuals do?

10,000 doctors every year are refusing to serve Medicare patients. That means many people won’t be able to get doctors appointments. What you can do? Doctors, not participating in Medicare are starting to charge patients monthly fee to see them. In effect doctors are signing up the patients they want to see to give doctors the income they want. These patients at least are assured medical opinions will be available to them. Start understanding medical coverage options in other countries…like Costa Rica or Panama (there are lots of others.) Those two countries have doctors that were educated in US and majority speak English. Last those countries are just few hours away and charge fraction of US doctors and hospitals.

Above is only one example. Many people have majority of their wealth tied up in value of their homes. What happens in major downturn when housing prices drop? In 2009 housing values dropped by over 50% in some markets. For most Americans that means there houses are worth far less than they paid. What can you do? Work to eliminate as much debt as possible, especially credit card debt and auto loans. If you can, pay off your house…or go to 15 year mortgage. Objective is to reduce debt so you can cover any remaining debt in a down turn.

Wages have remained flat in US for many years. How many? Depends whose figures you want to use. Assuredly since at least late 1990’s. Differences in years typically depends on rate of inflation that is applied.

To minimize this, acquire the things you need if times get tough. For some that’s food storage, for others it’s cash, or other products and supplies that are important to them.  If there’s run at supermarkets toilet paper becomes pretty valuable. Natural disasters have cleared the shelves of supermarkets many times. The economy doesn’t have to tank to cause major disruptions. People who have taken, even just a few steps, to prepare for emergencies that would affect them sleep better.

Most people live day-to-day. They assume things won’t happen. They listen and believe the media. Remember, no government cares much about their citizens. We are each just a number. Any of us that think differently aren’t thinking.

Jan, 26, 2016 Quote of the Day

“If the whole human race lay in one grave, the epitaph on its headstone might well be: “It seemed like a good idea at the time.”

Writer Rebecca West

Dame Cicely Isabel Fairfield DBE, known as Rebecca West, or Dame Rebecca West, was a British author, journalist, literary critic and travel writer. An author who wrote in many genres, West reviewed books for The Times, the New York Herald Tribune, the Sunday Telegraph, and the New Republic, and she was a correspondent for The Bookman. Her major works include Black Lamb and Grey Falcon, on the history and culture of Yugoslavia; A Train of Powder, her coverage of the Nuremberg trials, published originally in The New Yorker; The Meaning of Treason, later The New Meaning of Treason, a study of the trial of the British Fascist William Joyce and others; The Return of the Soldier, a modernist World War I novel; and the “Aubrey trilogy” of autobiographical novels, The Fountain Overflows, This Real Night, and Cousin Rosamund. Time called her “indisputably the world’s number one woman writer” in 1947. (Wikipedia)

——Ah, how many times people screw up because “It seemed like a good idea at the time.” Perhaps that thought should be a warning : Alert: Screw up about to occur.

Reflection…the best ideas in the world need time to germinate and stand up to the scrutiny of reflection. Maybe, perhaps, possibly, we might know if the idea is “good.” Truly good ideas are still standing the test of time several years later.

Ending Federal Deficit-Buffet’s Solution

Warren Buffet recently had excellent quote about the debt ceiling during an interview on CNBC:

“I could end the deficit in five minutes. You just pass a law that says that anytime there is a deficit of more than 3% of GDP, all sitting members of Congress are ineligible for re-election.”

U.S. Dollar Is Gaining Like It’s the 1980s. Is That Good or Bad?

Read interesting article on Bloomberg over the weekend, written by Chikako Mogi and Shigeki Nozawa.

We know the dollar is strong, but the global financial markets are lacking a cohesive direction.

1985 US Treasury Secretary Jim Baker introduced the Plaza Accord. By persuading Japan, Germany, France and UK to join in a coordinated plan to weaken the dollar. The dollar was to strong, which adversely affected US exports.

Then and Now

In 1980’s US had the leadership and strength of purpose to develop the Plaza Accord which benefited the US and the rest of the world. Today, while the Fed is in a position to raise rates, it is hesitant to do so. Makoto Utsumi was minister at Japanese embassy at time of Plaza Accord (and now chairman of global advisory board for Tokai Tokyo Financial Holdings Inc.) Today, “The common understanding for the need for policy cooperation shared at the Plaza Accord is lost and it’s not clear where the true leadership is in each country or in the world.”

International Monetary Fund reports that global imbalances were hindering global growth. There is a Group of 20 foreign countries which meets to address slowing Chinese economy. Their meeting ended without any concrete policy on how to proceed. There is serious lack of coordination or agreement on how to proceed to avoid an economic disruption.

Why? The Plaza Accord came about because of long established relationships between treasury officials of various countries. Those relationships take years to develop and don’t exist in the world today.

It’s understandable that the G-20 meetings lack agreed upon decisions. Getting 20 countries headed in the same economic direction is like herding cats. There are just to many countries involved to expect agreement.

That leaves it up to the G-7 countries. This group of countries  has worked together in the past to return currency markets to an orderly balance. But it is expecting a lot that the G-7 countries can accomplish what they did in the past. 30 years ago they controlled 50% of world’s GDP. Today they only control 34%.

So What Should We Expect?

-The Fed to keep interest rates low longer than expected. That does not mean the Fed won’t raise rates within next few months…but it is unlikely Fed will raise rates much. Fed goal is to protect US economy.

-Unfortunately, there does not appear to be the leadership necessary to coordinate a world wide economic policy that can benefit majority.

-That means, in the US, we can expect the stock market to continue the current trend of ups and downs.

-Fed in the past had plan and policy telegraphed well in advance. That enable companies and countries to plan 2-3 years ahead…instead of current 2-3 months.

Most important take away for all of us?

Two points

-In all things people, companies, and countries, need to be looking ahead 2-3 years.  We all need to be evaluating short-term in relation to longer term plans, except in dire emergencies.  Is it hard to do? Not really. Only question is if we are disciplined enough.

-The importance of establishing  long term relationships. Personally and in business.

 

Here is link to entire article on Bloomberg. .

Tom’s Take: What Did You Learn from Your Toughest Situation?

It’s not always fun to re-visit the toughest situation you have dealt with. It could have been in business, or a personal situation.

What did you learn from the situation that you can apply today to business challenges facing you? Dealing with tough situations shape us and challenge us. We’ve each dealt with them. What can you apply today to improve?

Capitalism and You

Recent Pew poll indicated only 52% of Americans have a favorable view of capitalism.

Yet, according to United Nations, poverty has declined more in last 50 years than in the previous 500 years. Adjusted for inflation, incomes have tripled in last 50 years.

Human beings, technology combined with capital markets create a problem solving machine that enables the decline in poverty.

Free market system has a severe branding problem.

John Mackey, founder and CEO of Whole Foods  has written excellent book, Conscious Capitalism.  He points out four values of business:

1. Business is good because it creates value.
2. Business is ethical because it is based on voluntary exchange.
3. Business is noble. It can elevate our existence as high as our talents will take us.
4. Business is heroic because it lifts people out of poverty and creates prosperity.

Capitalism is about meeting people’s wants and needs.

Each of us in business need to start branding capitalism positively by reinforcing the above points with our employees and with social contacts we meet.

Talent Metrics

Dr. John Sullivan had good article on Predictive Analytics in Mar 9th issue of ERE.net.

Here’s very brief synopsis.

Initial efforts in predictive analytics concentrated on:

  • Identifying employees likely to leave.
  • Identifying  which factors predict on-the-job performance.
  • Forecasting when employee survey scores will begin to impact productivity.
    What’s Needed Next?
  • Identifying how talent actions impact profits.
  • Identifying ways to identify and project ways to improve revenue per employee.
  • Developing an easy-to-compare index to measure performance.
  • Developing a metric that identifies the replacement cost on individual employees and positions.
  • Predicting coming productivity issues.
  • Coming up with a metric to identify employee behavioral issues.
  • Plotting career trajectory of new hires and existing employees.
  • Identifying factors that impact manager success.
  • Likewise the factors that identify leaders and leadership capabilities.
  • Metric identifying factors that predict an innovator.
  • Plus several others.

You get the idea, industry, unions, schools, and all levels of government need to do a much better job of identifying the characteristics needed to hire and then keep good employees. Many companies have identified the above for select positions. There’s a need to step back and identify trends that impact more than a single position or job classification.

Why?

Very few companies have real training programs. At the same time the educational level of public school students in US continues to drop. (Last I saw US was ranked 12th in the world. Wasn’t too many years ago we were ranked first.) World is becoming much more technology reliant and that is going to require different skill sets and different ways to measure productivity.

Unless industry, government, schools and unions develop better metrics and then apply them to ALL employees we will have fewer and fewer people available to do the jobs necessary. That in turn will:

-drive wages up fast,
-further the spread between classes
-Increase the percentage of permanently unemployed and under-employed.

Result will be reduced  innovation and profit margins.

Four Basic Truths to Help You Navigate the Financial News

Dictum Number 1: People do not get what they want or what they expect from the markets; they get what they deserve. 
 
Dictum Number 2: The force of a correction is equal and opposite to the deception that preceded it.
 
Dictum Number 3: Capitalism doesn’t always take an economy where it wants to go; but it always takes an economy where it ought to be.
 
Dictum Number 4: The severity of a depression is inversely correlated with government’s efforts to stop it.
From Bill Bonner onThe Daily Reckoning, Oct. 31, 2014.

Citizen Vigilance

“Vigilance is the price our citizens must pay for having the most free and independent government on earth. We must be aware at all times of our liberties and guard them zealously. They’re our most precious possession, our richest heritage, the one inheritance that we can pass along to our children in full confidence and pride.”

This is a concept that is getting lost in America. Each of us needs to remind others that “freedom isn’t free.” We are only free as long as we hold politicians, people we meet, and ourselves accountable. One of the best ways to encourage others to be accountable is by the example we set each day.

Freedom isn’t achieved by taking from one person and giving to another. Freedom is achieved by creating opportunities for people to improve their lot. That also means people must take accountability for improving their lot in life. No one is “owed” anything in life.