Healthcare Tax Credit

We've been treated a shocking level of incompetence and ignorance, as a ranking Member of Congress bloviated about the tax -related writedowns that companies just took. Companies offering health care to retirees and others that qualified for a tax credit are required to adjust the carrying value of tax assets and liabilities when the law changes. Congressman Henry Waxman (D. CA), showed his ignorance of the SEC rules and ineptness at finding out how the process works.
If you are Waxman, wouldn't it be easy to wander over to the room where the committee that budgets the SEC meets, and do a little checking? Presumably not, one being consumed with the task of summoning those miscreant corporate officers in for a major public humiliation. Or,couldn't you have a staffer call the SEC? I mean, it is a government agency after all.
If you've ever read an 8K (which is the document these companies are legally required to file within days of such an event) or a 10Q or 10K, you will know that, betwen the lawyers and the CPA's, SEC filings are the most edited, bland, inoffensive, boring manuscripts to be regularly published.
In an economy that badly needs job creation, this is not an encouraging sign.

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Book Review: What Matters Now by Gary Hamel

Interview of Eric Schmidt by Gary Hamel at the MLab dinner tonight. Google's Marissa Mayer and Hal Varian also joined the open dialog about Google's culture and management style, from chaos to arrogance. The video just went up on YouTube. It's quite entertaining. (Photo credit: Wikipedia)Cover of The Future of ManagementMy list of must-read business writers continues to expand.Gary Hamel, however, author of What Matters Now, with the very long subtitle of How to Win in a World of Relentless Change, Ferocious Competition, and Unstoppable Innovation, has been on the list for quite some time.Continuing his thesis on the need for a new approach to management introduced in his prior book The Future of Management, Hamel calls for a complete rethinking of how enterprises are run.

Fundamental to his recommendation is that the practice of management is ossified in a command and control system that is now generations old and needs to be replaced with something that reflects an educat…

Have you ever watched, or been involved in, a business failure, where, despite the best efforts of hardworking people, the business doesn’t survive? Scott Sonenshein lived through it, as he describes in the Introduction to his engrossing book Stretch. (In some books, the reader can skip the intro- not this one; the introduction is a must-read part of the book.) He was hired by start-up Vividence in Silicon Valley at the very apex of the tech boom. Despite prestige VC backers, top-tier hires and $50 million, Vividence didn’t make it. As his career continued, that experience led to an interest in why some well-funded operations don’t succeed, while other, more resource constrained, do. Peter Senge wrote about reinforcing cycles as part of his book The Fifth Discipline, which I consider one of the finest business books ever penned. In it, Senge describes the downward cycle that some companies fall into, and why it is so difficult to reverse. Sonenshein explores those cycles from diffe…

The Acceleration of Asset Lite Business Models

The number of asset lite businesses is steadily increasing, as is the breadth of industries effected. I first noticed them in the 1970’s, when Baron Hilton sold several flagship Hilton hotels while retaining management contracts that entitled Hilton Corporation to a share of revenue and earnings. Over the next two decades, Marriott Corp copied and then perfected the hotel management agreement business approach, coupling a Marriott franchise with a management agreement for any one of a growing stable of brands (Fairfield Inns, Courtyard by Marriott, Residence Inns, J.W. Marriott, etc. etc.), enabling absentee investor/owners. It turns out, however, that asset lite business structures date back much earlier.
Franchises and Dealers Early versions of asset lite businesses include franchise and dealer organizations. Soft drink and beer distributors, auto dealers and tire and repair franchises date to the early nineteen hundreds, as manufacturers needed mass distribution. The dealers furn…

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