Category: General Commentary

By Posted on Posted in General Commentary

According to the NY Daily News, military contractor David H. Brooks just spent–are you sitting down–ten million dollars on his daughter’s Bat Mitzvah! Brooks says the figures are exaggerated, but he doesn’t deny that it involved private jets, multiple performances by rock superstars, and a very expensive swanky New York venue.

A Bat Mitzvah is a religious coming-of-age ceremony. A teenager (usually–I’ve been to the Bat Mitzvah of a woman in her 70s) leads a section of the prayer service, reads from the Torah (the five original books of the Bible) and chants a Haftorah (a section from one of the later Old Testament books such as the Prophets). Usually there’s a party afterward. It should not be about ostentatious displays of wealth and one-upping your neighbors.

With several hundred people attending, renting one venue for the ceremony/reception and another to prepare the food (an elaborate full luncheon), hiring a couple of workers, my daughter and two friends became Bat Mitzvah a couple of years ago. If memory serves me correctly, this whole event cost around $1800, or $600 for each participating family. And it was a great event–I daresay probably a good deal more spiritually meaningful than this obscene $10 million blowout. I can only imagine what her wedding will be like. Maybe Dennis Kozlowski, disgraced CEO of Tyco known for his lavish parties, will do the catering.

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By Posted on Posted in Business Ethics, General Commentary, Marketing Trends/News

Just back from several days in Minneapolis, and I had my trend-spotting radar up. Some observations:

1. The airline industry continues to shift.

We flew ATA and Southwest, and it was illuminating to contrast them. Southwest still very much encourages the nonconformists and humorists among its staff, and continues to do very well with on-time performance, full or nearly-full planes, and other metrics. And they continue to make things nicer for their customers. For instance, online check-in is a big improvement over the cattle-herd system of the old days, and printing your boarding group right on the boarding card is much better than the old plastic passes. Maybe it was my imagination, but it seemed to me there’s a bit more leg room than there used to be. And on today’s flight home, they even gave us each a square of chocolate!

Lessons for other companies: give your people room to shine and they will. Fill a market niche, and you’ll be profitable. Be nice to your customers, and they will return. Do all three things right and you’re a rare success in a troubled industry.

ATA, by comparison, was not a pleasant experience. The seats are jammed together to the point where, even at only 5’7″, I was extremely grateful to have an aisle seat so I had someplace to put my feet. (My wife flew Northwest recently, and said the legroom is even worse there.) On the way there, we discovered that the airline had never entered a change in our itinerary and had us flying the previous day. Luckily, we had a paper trail and there were still enough seats. Yet, even though I watched the ticket agent enter the correct information for our return trip, it seemed the check-in agent on the flight home had some difficulty getting the reservation to show up appropriately. And other little things–no sparkling mineral water or seltzer, only club soda (which has salt, on top of all the salt in the pretzels). And big things: ATA had over two hours to get our luggage to Southwest during our Chicago transfer; not one of our four bags made it on the plane, and neither did the bag of another passenger with the same itinerary. None of this was life-threatening, and most of it is a pretty small inconvenience–but it added up to somewhat negative experience that is likely to influence future purchase decisions. Oh yes, and the reason we were on Southwest in the first place is that ATA suddenly pulled out of our market long after we’d booked our flight. (Southwest doesn’t fly to Minneapolis.)

Lesson: No matter how good your advertising, your brand is built on positive and negative customer experiences.

(Disclosure: I was a fan of Southwest long before this happened, but I should point out that the company bought 1000 copies of Principled Profit: Marketing That Puts People First, prepublication. If that colors your view of my comments, so be it.)

2. A Discounter Goes Upscale

Southwest again. The airline’s Unique Selling Proposition has always been the combination of low prices, reliability, and superior service. Perhaps it’s the service aspect that’s helping Southwest Spirit, the inflight mag, to go after a very upscale advertiser profile. The pages are filled with ads for expensive high-rise housing, Las Vegas casinos, glitzy restaurants, expensive gizmos…and there are a lot of ads!

This could mean several things:

  • High-end consumers are putting greater value on low prices
  • Southwest’s superior experience means non-price-conscious consumers are seeking them out because they want to get there on time and be entertained
  • The airline may be experimenting with moving away from that USP, and higher prices may be on the way (though I suspect they wouldn’t be quick to throw away 30 years of loyalty built in large measure by affordability)

I’ll try to do Part II tomorrow

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By Posted on Posted in Business Ethics, General Commentary

Something most of the corporate scandals have in common over the past few years: those with their hands in the cookie jar already were receiving compensation that most of us would consider wildly excessive.

For a number of years, some companies have established maximum earnings for top execs as a multiple of the earnings of the company’s lowest- paid employees. So if the multiple were, say, 50 times, and the lowest paid worker made $15,000, CEO pay would be capped at $750,000. If the CEO wanted higher pay, that $15,000 a year worker would get an increase as well.

But we see CEOs with compensation in the hundreds of millions. Often the crooked ones. The Wall Street Journal reported that Enron Chairman and Chief Executive Kenneth Lay was paid $67.4 million in the year immediately prior to the company’s bankruptcy filing. That same year, according to the American Institute of Certified Public Accountants, Tyco’s Dennis Kozlowski received $125.3 million in total compensation. And you can bet that the lowest paid workers at Tyco got nowhere near 1/50th of that.

Yet these outrageous figures weren’t enough to keep them from stealing? How much money does any single person really need to live on?

A very interesting solution was proposed in this report of the Center for Corporate Policy; I like it because it relies on tax law, rather than coercion, to enforce the cap:

Cap CEO pay through a maximum wage. This can be done by eliminating tax deductions for executive compensation above a certain amount — e.g. above 25 times that of the lowest-paid employee, a standard originally proposed by management guru Peter Drucker. Rep. Martin Sabo (D-Minn.) has included this proposed standard in “The Income Equity Act of 2003” which would eliminate all tax deductions for compensation above 25 times that received by the lowest paid worker in the corporation.

Another law, proposed by Rep. Barney Frank of Massachusetts, would initiate strict disclosure rules for CEO compensation, making the packages subject to investor scrutiny for the first time.

These are both positive steps. And long overdue.

There will be a consumer rebellion if steps are not taken to curb these excesses.

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By Posted on Posted in Business Ethics, General Commentary

Let me get this straight right at the beginning: I believe in capitalism. In fact, I write books teaching people how to be better and more successful/ethical capitalists, like my award-winning most recent book, Principled Profit: Marketing That Puts People First.

But my sense of justice is deeply affronted by this week’s news. The Washington Post story says, in part,

High prices for crude oil, gasoline and natural gas helped Exxon Mobil Corp. to its highest-ever quarterly profit, $9.92 billion, up 75 percent from the third quarter last year, the company said yesterday.

Profit in the third quarter at the world’s largest publicly traded oil company set an industry record, and its sales of $100.72 billion were the highest in a quarter by U.S. company, according to Standard & Poor’s.
Exxon Mobil’s third-quarter profit, $9.92 billion, was the highest the oil company had ever recorded.

Analysis
Oil Industry Seeks to Cast Huge Profits as No Big Deal
By most familiar comparisons, the $9.92 billion profit earned by Exxon Mobil Corp. in just three months is almost unimaginable. It would cover all Social Security benefit payments for three months. It would pay for an Ivy League education for about 60,000 kids. It would pay the average list price…

Other oil companies have reported soaring third-quarter profits this week. Royal Dutch Shell PLC, based in the Hague, said yesterday that its third-quarter profit was not far behind Exxon Mobil’s: $9.03 billion, up 68 percent. London-based BP PLC reported profit of $6.53 billion, up 34 percent.

(If that link goes dead, or you want other perspectives, here’s a link to a whole bunch of other stories on the same theme. That includes the YahooNews story that says Exxon Mobil “rewrote the corporate record books.)

There’s nothing wrong with profit in and of itself. But could this obscene 75 percent profit possibly have something to do with increases of up to a dollar a gallon at the pump in the immediate aftermath of Katrina, which followed closely on a wave of increases that added about 40 cents a gallon even before Katrina hit? Bodies were floating through the streets of New Orleans, tens of thousands were made homeless, and meanwhile, oil company profits–not revenues, but merely the money left over in these three months after the costs of operations–$25.5 billion just from the three largest profiteers–is equal to or exceeds the entire yearly economic output of any of the world’s poorest 159 countries, from Jordan on down.

While I’m fully convinced that “peak oil”–the idea that the easy-to-get stuff is gone, and that the cost of oil extraction will continue to rise rapidly as supplies diminish, and that we had darned well better get off the petroleum economy–is a reality, this is price gouging, clear and simple. I don’t have enormous sympathy for the single occupant of a mammoth and usually unnecessary SUV, croaking out all of 9.6 miles per gallon in the case of a Hummer S2, but I do feel sorry for the working stiff who bought an appropriate vehicle and watched fuel costs double. And then, factor in home heating costs, which are a big factor here in the Northeast–or cooling costs elsewhere. It ain’t pretty.

Surely the time has come to make a commitment, as a society, to nonpolluting, nondepletable, environmentally friendly ways of powering our economy. The technologies–solar, wind, small-scale hydro, and others–have been around for decades and continue to improve. Let’s leave the profiteers out of the loop.

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By Posted on Posted in General Commentary, Media Ethics

Paul Demko writes in the Twin Cites alternative paper, City Pages, about one Tim Mahoney, a part-time copy editor who attended the big September peace rally in Washington with other members of his church.

Mahoney got a stern talking-to, a three-day suspension without pay, and was removing from editing any stories about Iraq. He was told he’d be fired for a repeat offense.

The paper claimed, as it has claimed previously in another case now making its way through the grievance system–two reporters attended a rock concert that raised funds for the Kerry campaign–that Mahoney’s actions were a violation of the paper’s ethics policies.

Now, you know that I can be pretty loud when I see ethics violations. As the author of Principled Profit: Marketing That Puts People First, a columnist for Business Ethics magazine, and the originator of an international pledge campaign around ethics, I think I’ve got some credentials in this area. And while I certainly see the ethics issues if a reporter gets involved with partisan political activity that he or she is actively covering (did someone say “Judith Miller”?), I fail to find the justification here. Journalists are allowed to have personal politics, last time I checked. And a copy editor isn’t even creating the story, merely making sure that it’s internally consistent with its own logic and the rules of English.

This strikes me as a punitive action on the part of a newspaper that doesn’t happen to agree with the stand the reporter took, and is trying to pre-emptively prevent other staffers form expressing their opinions. It reminds me of the time an employee of one of the two major soda companies was fired for drinking the competitor’s product, outside of work if I remember correctly.

No one should have to leave their soul outside on the way to work.

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By Posted on Posted in Events, General Commentary

Sigh. Why is it that so often after there’s a natural disaster, if you dig deeply into the cause of the death toll, you find humans taking unconscionable shortcuts in construction…and other humans in charge of safety oversight looking the other way?

Last week, I happened to sit next to a very intelligent and politically aware Pakistani gentleman at a Bruce Springsteen concert. In the hour before the music started, we had a long talk. My new friend just sent me a link to the work of a Pakistani ethics writer, Ardeshir Cowasjee. His latest weekly column is all about the direct responsibility for fatalities in the recent earthquake…on the shoulders of those crooked builders and didn’t-see-nuthin’ officials.

Read it and weep!

But then turn to another of Cowasjee’s columns, and see an example of the triumph of the human spirit.

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By Posted on Posted in Ethics in Government, General Commentary

https://www.abovetopsecret.com/forum/fema.html

https://www.nytimes.com/2005/09/10/politics/10policy.html

https://www.nytimes.com/2005/09/10/national/national special/10contracts.html

These three articles together paint a deeply disturbing picture. I see a very chilling future, in which the poor are shipped off to gulags, the tattered remains of the once-vaunted safety net go up in smoke, and war profiteers get richer on the backs of those in the camps.

It sounds alarmingly similar to some of the events during the
German occupation of much of Europe in the 1940s.

The first link is apparently the journal (with photos) of a member of a conservative Southern church who tried to bring supplies in to a refugee camp in Oklahoma–a camp that she knew, because her church had a cabin there. Not only were her supplies refused, but she saw and documented evidence that detainees will not be allowed to leave. And there have been wide reports of help and supplies refused; as one example, our local paper yesterday ran an interview with a local doctor who flew down and had to cool his heels in Baton Rouge while exactly one doctor was trying to handle the entire medical needs of the New Orleans Convention Center evacuees. (To view the story, you’ll have to register)

As a journalist, I’m trained to be skeptical, and that this detainee camp journal is posted on a conspiracy site makes me suspicious. But as far as I can tell (I’m no Photoshop expert), the pictures and the narrative are genuine.

If this is really true, it would appear the government is setting up prison camps for the poor and homeless people who were unlucky enough to live in Katrina’s path.

This is simply unacceptable. Those who lived near the Soviet Gulags and the Nazi extermination camps claimed they did not protest because they did not know. If this turns out to be true, we must protest loudly and consistently.

The second and third links are stories from the New York Times. First, that some people in the GOP have seen the storm as an opportunity to advance their social policy: tuition vouchers for evacuees attending private schools, an attack on “prevailing wage” laws, and a fast-track green light for industry. Given that we have made no informed decision as a country on how and where to rebuild New Orleans, the other overdeveloped coastal areas, and the wetlands between the city and the Gulf of Mexico, the fast track for new construction is a concern.

Don’t get me wrong. Like everyone else, I want to see jobs created, infrastructure rebuilt, and some sense of normalcy restored. But I want to make sure we treat these delicate and storm-prone coastlines and wetlands with respect, and that we think long and hard about how and where to build without just rushing blindly forward to destroy more of the barrier islands and wetlands and places where no sane person would build.

Coming on the heels of what we now know about how first, the Bush administration repeatedly slashed budgets for shoring up the levees, second, stood idly by as the hurricane swept in, and third, completely mismanaged the disaster response (where they do share the blame with local officials), it’s particularly scary. Did you know that while the government was doing essentially nothing to get ready, Wal-Mart mobilized a fleet of trucks, filled them with relief supplies, and positioned them close by but outside storm range so they could respond instantly? I am, to put it mildly, not generally a fan of Wal-Mart–but in this case they were terrific. And if they could be so organized, surely the federal, state, and local governments could have done a lot to minimize the catastrophe.

Finally, the article about high-powered well-connected lobbyists lining up to make sure their clients have a place at the trough. The story, by John Broder, says,

Hundreds of millions of dollars in no-bid contracts have already been let
and billions more are to flow to the private sector in the weeks and months
to come. Congress has already appropriated more than $62 billion for an
effort that is projected to cost well over $100 billion.

Some experts warn that the crisis atmosphere and the open federal purse are
a bonanza for lobbyists and private companies and are likely to lead to the
contract abuses, cronyism and waste that numerous investigations have
uncovered in post-war Iraq.

Not surprisingly, Halliburton has already pushed to the front of the line; its Kellogg Brown & Root subsidiary landed a $500 million contract. Yes, these companies are capable of doing the work. But the ethics questions are, to say the least, troubling given the sordid history of these companies in Iraq and elsewhere, and their close ties to the Bush administration.

All in all, the whole thing–the situation that these three articles each reveal one slice of–is very troubling: a triple attack on America’s core values of decency, democracy, and charity.

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By Posted on Posted in Events, General Commentary

Like everyone else, I am horrified by the devastation in New Orleans and Mississippi and along the Gulf Coast. Frugal, I would point out, does not mean stingy. I made a generous donation to the Red Cross and notified someone who was offering to match the gift (he has reached his maximum–this was a friend, not a company). Even if you feel tapped out after whatever you gave after last winter’s tsunami, I hope you find room in your heart to open up and give again.

I have been to New Orleans and experienced its grace and charm–but also its grinding poverty and the big disparity between the successful and the have-nots, more glaring than anywhere else I’ve been in this country. It is the poor who were left behind during the evacuation, and who were met by the pathetic and inadequate response of a government that had several days to prepare, and didn’t make it a priority–in fact, a government that had systematically cut funding for repairing the levees, months ago, even as the city has been sinking for decades and even before Katrina, was well below sea-level. This is nothing short of a crime against the American people.

My hope is that A New New Orleans can be created, but not in the same spot. There must be some higher ground nearby where a new city can be built. And wouldn’t it be great if that city was created by planners who really understand the challenges of the 21st century: who design in such a way that not only does the city have the grace and charm of the (still miraculously surviving) French Quarter, but that it’s built to be sustainable environmentally, socially, and economically: that it’s designed from the ground up to create neighborhoods that people *want* to live in, that it’s set up with shopping and traffic patterns that minimize the need to use cars, that’s it’s built on a human scale and using the latest renewable energy techniques to have the whole city live lightly on the land and be as food and energy self-sufficient as possible.

That would be the best memorial to those who were swept away in the rising tides.
.
If any of you have newsletters aimed at writers, there’s an incentive immediately following from my colleague, Dee Power–please go ahead and reprint it.

As you may know we have started a fund raiser for the Red Cross, so far it’s raised
over $1000. If you publish a newsletter, belong to a discussion group or bulletin
board, would you consider including this announcement.

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Help Us Help The Red Cross

Make a donation of any size to the American Red Cross and we will give you our list
of 300 literary agents with names, addresses, and email addresses, a list of nearly 200
newspaper and freelance book editors and reviewers, the email addresses over 500
independent bookstores, and a format for a press kit and news release. Make your
donation at the Red Cross Website https://www.redcross.org/donate/donation-form.aspbews

by credit card or send your check to American Red Cross P.O. Box 37243
Washington, D.C. 20013 or call (1-800-435-7669).

After you’ve made your donation, email offer@brianhillanddeepower.com Please
include your first name and it would be nice if you would tell us the amount of your
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Thanks Dee

https://www.BrianHillAndDeePower.com Dee Power (Ms.) is co-author with Brian Hill of “The Making of a Bestseller: Success Stories from Authors and the Editors, Agents, and Booksellers Behind Them” March 2005, Dearborn Trade, ISBN 0793193087 Coming October 2005, “Over Time,” the novel, ISBN 0974075418

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By Posted on Posted in General Commentary, Media Ethics

https://www.sptimes.com/2005/08/18/Floridian/Media_s_quest_for_div.shtml

Eric Deggans of the St. Petersburg Times (who happens to be black) wrote this thought-provoking article about the dearth of people of color in positions of high visibility within the news industry, and how that plays out.

Among other effects, he finds the massive coverage of various white women’s disappearances hard to justify in light of the acute lack of coverage when a black woman goes missing.

And one can speculate (he doesn’t, in this article) about the often-negative portrayal of communities of color, especially inner-city ones–where the news coverage often focuses on crime and rarely talks about all the good community building going on.

Theses issues were expressed somewhat during the recent National Conference on Media Reform, which I covered extensively.

But Deggans also rightly points out that the major networks have had a massive defection of their most visible talent: “And despite an astonishing changing of the guard in network news that has seen Tom Brokaw, Dan Rather, Peter Jennings and Ted Koppel all leaving their high-profile jobs this year, no black person has surfaced as a realistic candidate to replace any of them.”

Sometimes, 1960 doesn’t seem so long ago. surely, as a society, we can do better.

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By Posted on Posted in General Commentary

World Business Council for Sustainable Development just released the highlights of its 2005 global sustainability study. And what jumped out to me is the sharp decline in ratings for Scandinavia, the European Union, the US, and Canada for successful management of the transition to sustainability (broadly defined along the “triple bottom line” criteria of environmental, social responsibility, and economic performance). Scandinavia still leads the pack, at 59 percent, but in 2002, the rating was 83 percent. EU: 23 percent this year, 37 percent in 2002; Canada from 25 percent down to 12 percent; and the US, from an already measly 4 percent down to just 1 percent. Japan, on the other hand, boosted its performance form 20 percent up to 25 percent. Brazil, China, and India were rated for the first time this year, all of them in the single digits.

In the government-supported US climate of Money Uber Alles, it’s not surprising that the US has fallen off. And the EU has just absorbed a lot of former East Bloc countries that are still recovering from the traditional neglect of human factors under their old authoritarian regimes. But what, I wonder, happened to socially progressive Scandinavia, with its strong safety net and seeming immunity from major business scandals? Have these counties backslid, or are their populations simply judging them by tougher standards?

Of course, in my book, Principled Profit: Marketing That Puts People First, I show how a concern for the triple bottom line builds the economic success of a company in the long run. And isn’t that what sustainability is really about?

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