Category Archives: Management

Financial Gems found in Famous Quotes

March 12, 2015 By in Management Tags: , 1 Comment

I have noticed a trend whereby people will post or tweet a quote, with nothing else: no analysis, no interpretation, not even a link to a relevant real world situation.

But that is not what I find strange. What I find strange are the scores of ‘likes’ and dozens of responses along the lines of “Right on!”, “Exactly!”, “How insightful!”, etc. How vapid. There is, though, one redeeming quality of this social media blight. I get to use the word vapid in writing for the first time in my life. Also blight.

I am not saying that these quotes from great minds are not enlightening, just that if one wishes to post quotes, then they should use it as the foundation of a deeper meaning. Otherwise it is just spam.

Not being one to simply point out problems without providing solutions, allow me to lead the way in posting pearls of wisdom from the long dead as well as my insights on these quotes. Attempting to provide value, if you will.

The trouble with the world is that the stupid are cocksure and the intelligent are full of doubt.
– Bertrand Russell

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Equity Issuance: A Danger Signal

March 3, 2015 By in Management Tags: , ,

Companies issue equity all the time. It is considered a normal part of business. In fact, when equity markets are doing well, CEOs will often push for a rights issue, arguing that the market is over priced and therefore it makes sense to issue new shares and sell them into the market.

That might seem to make sense at first blush. But if a CEO thinks that this makes commercial sense then they are being naive. The only other explanation is that they are less than honest. Let us explore why.

As a first step, why is selling something at a higher than value price incorrect? In general, if it is a non-producing asset, then there is nothing wrong with this. Selling someone a pair of shoes should not cause any issues. The problem lies in what if it is a producing asset?

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Delegation Will Set You Free

January 27, 2015 By in Management Tags: , ,

Centralised control has failed in every single economic endeavor known to man. As a national economic system centralised control, better known as communism, failed spectacularly in the USSR. More recently China’s attempt to incorporate capitalist elements to its centralised economic control framework lead to the country wasting USD 6.8 trillion in investment according to a recent report by the Financial Times.

Such failure tends to be true at the company level as well. Centralised management, or non-delegation, restricts the potential for a company. The CEO is a single person and if he retains complete control and refuses to delegate then he will limit the potential of the company to his personal ability to manage all of it. On the other hand, a more distributed control structure allows the company to scale its business by scaling its human resources.

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Planning and Reorganising Masquerading as Work

December 11, 2014 By in Management Tags: , , ,

One of the recurring themes in my writing is that there is not enough planning before action is taken. Maybe what I should have said is that there is not enough effective planning. The distinction is important as far too often too much planning and reorganisation gets in the way of real work. My experience is that there are two main sources for this wasteful work: perfectionism and deception. Continue reading →

Initiating Confrontation is Good Leadership

October 20, 2014 By in Management Tags: ,

A good manager learns how to manage conflict when it arises, as it invariably does in any organisation. A good leader learns how to initiate confrontation. This seems counter-intuitive to many people but that is because there is an incorrect presumption that confrontation is bad. I blame tree-hugging hippies for falsely promising a corporate utopia free from confrontation. Continue reading →