Coaching Tip: The Leadership Blog

Business Cycles & GE

As you know, 'good times' don't last forever....yet, people want to believe they do.  Like the turkey, who believes good times are commonplace until the third week of November, most people expect the good times to roll on.  And so, they only see what they are looking for.

If you understand that there are business cycles, you look for the unexpected and when it surfaces, you see it long before others do.

The CEO of the General Electric Company (GE) didn't anticipate a dip in profits during the first quarter---probably because he anticipated business continuing as usual.  GE stunned Wall Street last month when it reported first-quarter results below expectations, a stumble it blamed partly on the credit crisis.

Now, GE recognizes that the Recreational Vehicle (RV) and Watercraft industries lead the economy during the downside of a business cycle.  Traditionally, these recreational industries have led the stock market, housing starts and other early warning indicators because they are the largest discretionary purchases made by the consumer. 

That is why the GE consumer-finance unit plans to stop providing loans for the purchase of recreational vehicles (RVs) and most watercraft.  "It's a challenging time for RV and Marine financing," said Cristy Williams, a spokeswoman for GE Money.  "We just didn't see the returns that we wanted to see."  GE has said it would reduce its exposure to some of the more-volatile areas of the financial-services sector.  The company is expected to sell as much as $50 billion in consumer and weaker-performing commercial-financing assets this year.

Successful Tech Entrepreneurs

There is a myth that the successful tech entrepreneur is a Bill Gates-like 20-something college dropout who strikes cyber gold in his garage.  Nothing could be further from the truth.

According to a recent survey by the Kauffman Foundation, the average tech company founder is pushing middle age at 39-years-old...and...nearly five times as many founders were over 45 (24%) as were younger than 25 (5%) when their companies got off the ground.  The survey asked questions of 652 U.S.-born executives at tech companies started from 1995 to 2005 with revenues of at least $1 million.

To gain the business experience and personal confidence of going out on their own, on average, these entrepreneurs had 16.4 years between when they finished school and started their companies.  Forty percent had a master's degree or a doctorate.  Although more likely to have received a techie degree than the general population, only 37% graduated from computer-science or engineering programs.

Source: The Wall Street Journal, May 6, 2008

Microsoft dodges $48 billion bullet

Microsoft's pursuit of Yahoo ended on Saturday.  The $48 billion bid, came after Microsoft had invested untold billions of dollars over the years into unprofitable and undermanaged online services, while Google and a host of smaller players found a windfall in online advertising.

The software giant's share of Internet search queries was a mere 9.4% in March, while Google Inc. had a 59.8% share and Yahoo a 21.3% share.  Buying Yahoo was supposed to help reverse struggling Microsoft's online services by adding size--in particular, a mass of consumers and advertisers--to what Microsoft already had.

In a letter to Microsoft employees Saturday, CEO Steve Ballmer pledged to "pursue partnerships and investments" to expand Microsoft's scale in online services while investing in the engineering behind the services.  Microsoft's next course of action will likely be to try to form a competitive advantage through tie-ups with other Internet companies that could pull more consumers and advertisers to its Internet services.

As Google continues to leverage its huge marketshare advantage by increasing advertisers' costs, Microsoft has an opportunity to become the umbrella for a stable of many specialty search engines...at a much lower cost-per-click (CPC) price than Google offers.

Here is why specialty search engines are the next best thing:

BOOMER SEARCH ENGINE: www.cRANKy.com got its name because the creators say that many older users get cranky when they use more traditional search engines. Launched January of 2007, this site is run by the same folks who launched www.Eons.com. 

In the age of Google, being special increasingly requires standing out from the crowd online.  Some of the "un-Googleables" say being crowded out of search results actually carries a professional and financial price.  That's because people increasingly rely on search engines to find things they want to read, music they want to hear, people and companies they want to do business with. 

CEO and HR Priorities

Has your chief executive officer (CEO) crafted a leadership style that centers on authenticity; that means constantly communicating with employees about the company's important issues?  Does your CEO try to get across what s/he's like as a person, what s/he values (like spotless ethics, emotional maturity), and the vision s/he has for the organization?  Rather than avoid the animosities, communication breakdowns, and jealous flare-ups on the CEO's executive team--as well as his or her own defects--does the CEO confront them head on?

If the answer to all the above questions is "yes," then your CEO has gotten over the CEO Disease by working with a personal leadership coach to become more self-aware and able to allow his or her leadership perceptions to evolve.

There is an old Yiddish proverb that applies to every organizational leader: "The fish always sinks at the head."   The leader with CEO Disease doesn't know the smell that he or she is spreading throughout the organization.  The personally coached CEO discovers what smell he or she is spreading across the corporate culture and works to make it a productive and positive scent.