What Would David Packard Do?

By Dean Zatkowsky

Many businesses are going through the exercise of cutting costs to compensate for declining revenues. Some have chosen a path pioneered by David Packard.

In 1970, when the economy stumbled and Hewlett-Packard faced layoffs, Packard proposed - and the company embraced - a novel alternative. Rather than layoff 10% of the workforce, the entire company took a 10% work schedule cut, working just nine days every two weeks. As Packard explained in The HP Way, "The net result of this program was that effectively all shared the burden of the recession, good people were not released into a very tough job market, and we had our highly qualified workforce in place when business improved."  Packard hastened to point out that this solution only applied to what was clearly a temporary situation; the company could not guarantee full employment under all scenarios.

Read more...

Categories: Corporate Culture | Education | Entrepreneurialism | Leadership | Economics

0 comments - Posted by Dean Zatkowsky at 3:38 PM

"When you run into debt..."

Americans marvel at the wisdom of our nation's founding fathers, who crafted a Declaration of Independence and Constitution that so eloquently express the aspirations of humankind through the ages. Thomas Jefferson and Benjamin Franklin, in particular, get a lot of praise for their genius.

Too bad we ignore their financial advice.

Both men spoke about the dangers of debt. Jefferson warned against public debt, perhaps generalizing from the demoralizing weight of his extensive personal debt. Franklin, one of the richest Americans in history and a lifelong proponent of liberty, made his position clear: "Think what you do when you run into debt; you give to another power over your liberty."

Read more...

Categories: Education | Finance | Economics

10 comments - Posted by Paul Orfalea at 10:16 AM

Bubble to Bubble

By Lance Helfert

Satirical newspaper The Onion ran this headline in July 2008: "Recession-Plagued Nation Demands New Bubble to Invest In." The joke works because it's true, and because investment bubbles of the last fifty years were so frequent, so frenzied, and so well documented. The history of economics - and progress - has been a history of bubble and bust economic cycles.

Read more...

Categories: Finance | Economics | Investing | Optimism

0 comments - Posted by Dean Zatkowsky at 8:28 AM

Shelter from the Storm

By Lance Helfert

Many financial journalists wrote about bear market opportunities long before our current recession achieved official recognition. Back in December 2007, Tim Middleton wrote about "Recession-proof ways to make money," noting that "Consumer spending, which accounts for two-thirds of gross domestic product, is weakening. But some forms of spending do not weaken as much as others. Addicts will buy cigarettes at almost any price. When factories are emptied, saloons fill up. People don't stop going to the doctor or paying their electric bills."

Companies like Molson-Coors (NYSE: TAP), Johnson & Johnson (NYSE: JNJ), and Kimberly-Clark (NYSE: KMB) seem to fit in with this set of "everyday purchase" companies, and they also meet the three criteria of the so-called "recession playbook" of large-cap stocks with safe earnings and international exposure.  Portfolio Manager Chris Orndorff told US News & World Report that recessions create opportunity as well as upheaval: "There are always ways to make money, even in a recession."

Read more...

Categories: Economics | Investing

0 comments - Posted by Dean Zatkowsky at 10:05 AM

There's More to the Housing Market Than Homes

Every discussion of "The American Dream" revolves around home ownership, although many would argue that the quest for universal home ownership contributed to our current financial crisis.

When politicians and the press talk about housing today, they invariably talk about homeowners at risk of foreclosure, and heaven knows that's an important topic, particularly for the people affected directly. But there's more to the housing market than primary residences.  Many Americans own a rental property in addition to their own home, and many investors devote a significant proportion of their portfolio to real estate holdings.  For better or worse, real estate prices depend on these people's actions too.

Read more...

Categories: Finance | Economics | Investing

0 comments - Posted by Paul Orfalea at 5:00 PM

Take Ownership

by Dean Zatkowsky, co-author of Two Billion Dollars in Nickels

Recently I addressed a Rotary Club luncheon, and began my presentation by inviting Federal Reserve Chairman Ben Bernanke and Treasury Secretary Timothy Geithner to join me at the podium.

After a few seconds of silence, I said,  "Oh, they're not here yet? Well, maybe we shouldn't wait for those guys. Maybe we should figure out how to save the economy by running our businesses better..."

Read more...

Categories: Entrepreneurialism | Economics | Competitive Advantage | Optimism

14 comments - Posted by Dean Zatkowsky at 10:15 AM

Ambassadors of Capitalism

By Dean Zatkowsky, co-author of Two Billion Dollars in Nickels

Many people see our current economic crisis as an indictment of capitalism itself, but I think this is just as misguided as the idea that  "government is the problem, not the solution." That we have incompetently managed our government and our economy proves only that we have been careless and irresponsible in our stewardship of two great and noble ideas.  Capitalism and democracy remain worthy goals, and we must aspire to be worthy of them.

I've heard conservative pundits accuse academia of turning young people against capitalism, but I don't believe it.  As an old marketing guy, I'm convinced that brands are formed by experience, not sloganeering.  I agree that many young people are turned against capitalism, but not by their professors. Young people are turned against capitalism by their first experiences in the workplace.

Read more...

Categories: Corporate Culture | Management Skills | Entrepreneurialism | Economics

0 comments - Posted by Dean Zatkowsky at 9:44 AM