Business Principles and the Law
Law affects all business relationships
My real Martin Luther King Jr. Day of Service
On Monday January 19, 2015 – Martin Luther King, Jr. holiday – recently the call has been to make this day – A day on, not a day off.People are encouraged to engage in service projects and participate in activities that commemorate or educate on Dr. King’s life and the civil rights movement.
This year with all the protests prompted by the death and lack of justice for Michael Brown, Eric Garner and the horrible killing of two NYPD officers, many have taken to the streets in protest. While signs proclaim “Black Lives Matter”, I believe all lives matter. As you do to the least of us, you do for me.
On January 19, 2015 in the San Francisco Bay Area, I participated in a multi-organizational clean-up of Lake Merritt Park and its Gardens. While the clean-up was important, my real MLK Day was working along side two of my sorority sisters who had been raised in Jim Crow Alabama and Mississippi.
The stories they shared of segregation had me and another soror riveted. One of the women raised in Birmingham knew one of the girls killed at the 16th St. Baptist church. She told a story of sharing her experiences with her son who somehow did not believe her until they visited the 16th St. Baptist Church and she asked the janitor to allow them on the main level so she could show her son that area. The janitor and my soror soon discovered that they knew each other and attended the same elementary school and he remembered her.
My other soror shared how segregated Mississippi paid for her to attend a private high school, so they did not risk her integrating the public high schools. She also shared how the highest scoring boy and girl on the high school exit exam were featured in the local paper. She saw the girl in the paper who had received the highest score but knew she had already been accepted to Tuskegee. However, the principal of her catholic school, a nun, called her in and shared that she had indeed scored the highest but was denied being in the paper due to racism. She received a Bulova for her accomplishment which she proudly still owns.
Young people took the lead in fighting for change by sitting at lunch counters and getting arrested. These women shared their first hand knowledge of these events. It’s one thing to be a child as I was and remember seeing the fire hoses turned on people on television. It is another thing entirely to have your friends hosed and arrested.
I asked these women how they felt about the recent protests in our area as I shared I believed the protests were misdirected. I shared that I felt the civil rights movement was targeted on protesting specific areas of discrimination and demanding change whether lunch counters, buses or voting rights. They agreed that now if seems people just want to get on the news or cause a disturbance.
My history lesson
The Alameda County Public Defender’s Office is the only group to set forth specifics that I believe will address needed changes to the criminal justice system in the United States.
I hope that this movement will transform to ALL LIVES MATTER with specific steps to improve police and community relations, the adjudication of actions even if the grand jury is involved and most importantly let’s place the same energy around voting and jury duty that we are putting around shutting down BART and the freeways.
Protests – What’s next
We know that justice isn’t being served but it is not a new thing, so what are we going to do about it? Injustice goes back to Angela Davis, Assata, the leaders of black nationalists’ organizations back in the sixties and seventies and the concerted effort from the government to subvert these groups and bring them down because they were advocating for change that those in power did not want even though it was just. So now, it continues, it continues, it continues. What I say is we need to stop killing ourselves. Build our strength, develop our troops. If this is a war, we are killing ourselves from within, that’s the old Willie Lynch model.
Let’s strengthen our base, educate our children, and create our own businesses. I’m not saying be separatists or black nationalists, what I am saying is be smart in the economy that we have, with the situation we are in and start take care of ourselves and each other. Let’s make a stink about everything that happens in our communities. We get blamed for everything anyway. So we need to just start focusing on being better to ourselves, and build ourselves up so we can get out there and be better from the bottom to the top and be about it. And be about it means being the best and taking care of people. And not getting five cents and deciding that I can’t you the penny I owe you that you gave me when I didn’t have anything last week. So that’s my prescription.
If we’re going to protest, let’s be focused. What wrong with the system? The problem is with the police and the courts so let’s address that and not stop BART and block the freeways, people are trying to go to work and school. Destroying businesses is not the answer. Some people have businesses. We talk about don’t work for the “man” and you are looking forward to Black Friday and then we say let’s boycott Black Friday. A Black Friday boycott is not going to hurt the police or the criminal justice system. We need to figure out how we’re going to positively impact the police and criminal justice. And I say if you did not vote in the last election, you don’t get to be out in the streets protesting. So let me see your “I voted” sticker or some proof that you voted and then you can go out here and protest. I don’t think that people who voted are out here tearing stuff up, I just don’t think that’s the mindset but if you are a voter and tearing stuff up, I’d like to interview you.
So what would we say if those in power said to the protesters, “Okay, enough already, what do you want?” How would the protesters respond? Is there a spokesperson, is there a leader? Is there a common theme? Is there a common goal, so that every protester would articulate the same objective? To be pondered or are we just protesting to have anarchy or to just have a tantrum and be mad. A protest without a purpose is a waste of time, money, and effort. If it’s all about just getting on the news, getting arrested, or stopping traffic then we are not going to change what we are protesting against which should be the objective.
It is said that the definition of insanity is doing the same thing and expecting a different result. So it is with the Republicans or anybody that believes in trickle down economics. The rich have not created jobs from 2000 to 2008 and all their money can not replace the buying demand of the middle class who have lost jobs and the ability to borrow against their homes. The lament was loud and wide for only 69,000 reported jobs growth in May yet here in California where gas is $4.15 for regular almost $.60 higher than the national average, the economy seems to be picking up.
In, California, the limited housing inventory coupled with job growth in certain sectors is driving up home purchase prices and rents in San Francisco and Silicon Valley. Unemployment and housing growth are linked together. As people become more secure with jobs, their income enables the ability to buy. I know the banks are sitting on inventory here and the foreclosure wave is just beginning to hit other neighborhoods across the country.
So while the economy bubbles along, the rich continue to play with other people’s money and create nothing. Sometimes I ponder, at least in the days of Carnegie and Rockefeller, the rich used their foundations to help their tax status and the masses benefitted. Today, what has Romney given back? What foundation does Romney support? How has Romney helped those less fortunate? Until the middle class and the working poor team together to forge some economic and political change, the might of the rich on our political process will continue to strangle our country.
Only the rich will be able to afford college. With fewer jobs, America will be like cities in Europe with the young revolting with nothing to do. What will create growth and a more global mindset? Even China and India are slowing down, so what is the answer? There are pockets of growth throughout the country but until and unless the rich in Congress see the benefit of taxing themselves for the benefit of the country, little will change unless we vote these millionaires out of office.
For real change, people need to become uncomfortable but materialism still holds the public’s fancy. Things over rights numb people to organizing for change and real progress. I know that what Romney is advocating has not worked and will not work. Romney has benefitted from the current policies and for his own personal benefit seeks to continue and augment those policies, everyone else be damned. What will it take for worldwide growth? What will it take for worldwide progress and peace?
If you believe my friend, my personal Nostradamus, we are in our final days. I’m not sure we are at Revelations yet, so let’s get the world economy started.
Grapes of Wrath
In our country, it would seem that with our current economic climate that those who are protecting our borders and professing that illegal immigrants are taking jobs away from our unemployed must have envisioned a renaissance of the Joads. But the reality is that fields are being plowed under with crops unpicked throughout our country, whether Visalia onions in Georgia, or strawberries or cherries in California. What were we thinking? Did we think the unemployed would rush to work in the hot sun for the wages the migrants worked for? Did we think that the economy of these towns where immigrants would spend their hard earned dollars would continue to thrive without their labor? Talk about cut off your nose to spite your face.
Is it racism that fuels the drive to not have this workforce present? America was built on slave labor and then immigrant labor, so let’s be honest, we are not doing so well that we can shut our borders. Better to continue to allow this workforce to persist and grow, have them pay taxes and become part of the communities with their children. Right now it does not look that anybody is benefiting from the current policies. I would ask the farmers to speak to their elected officials to stop the current policies. Would we rather import our food from Chile or other places when we know America can feed the world?
We don’t want to educate our young to be competitive and they don’t want to do manual labor. What does the future hold? I had a friend express that if the Latino community decided to discontinue working the restaurant or hospitality industry, many business would suffer or go under. The next time you enjoy your favorite restaurant, take a look at who is working there, at the front desk, at the bar, busing tables, in the kitchen cooking and working throughout. I don’t say this to be negative or profile, but the survival of this industry is dependent on this workforce and we need to recognize and appreciate the contribution not strive to eliminate the workforce.
And while Republicans focus on food stamps to needy families when the research shows that the benefits support and help families, the real entitlements go to large farms and their subsidies. Maybe the farms don’t care if their crops get picked or not since they get paid to grow and not sell. 90 Billion, yes a B, is spent on farm subsidies! What a help those funds could be for education, or infrastructure.
Is Honesty Really the Best Policy? – Toyota, Atlanta School District and a Milwaukee Mom
A common statement is “What happens in the dark will come to the light”. Such reality happened to Toyota Motors. From 2000 to 2005, Toyota quietly recalled 36% of their cars sold. It was not until the the acceleration problems and resulting deaths that Toyota and world had to take notice that Toyota was producing an unsafe product. Consistent with Toyota’s operating philosophy or TPS (Toyota Production System) to eliminate waste with constant improvements, identify problems immediately, determine the root cause and resolve, several Toyota executives in Japan reported the safety problems in 2006. For 5 years from 2000 – 2005, these executives monitored and documented problems that current practices were resulting in unsafe cars. At the risk of losing their jobs, they reported their findings but nothing was done to change the manufacturing problems. Competition and simply greed instead of the storied Toyota quality led to Toyota’s current economic problems. Now lack of trust in their product has resulted in an economic ripple effect impacting all their employees and dealers worldwide.
For the Atlanta Schools districts, their pressure was also greed and pressure to acheive created by the standards set by the “Leave No Child Behind” program where school test scores determined federal monies, foundation grants and bonuses for achievement. In the Atlanta area, directed by then Superintendent Beverly Hall, principals and teachers altered test papers to reflect the correct answers supposedly to preserve jobs. Superintendent Hall was named the superintendent of the year in 2009 and conveniently stepped down 30 days prior to the test-fixing scandal eruption. Rumor has it that former Superintendent Hall is in Hawaii enjoying $155,000 in bonuses received for the improvement for the
Criterion Referenced Competency Test (CRCT) test scores in her 55,000 student school district. Many states and school districts place a high priority on test results with up to $25,000 in bonuses for improved scores and loss of jobs or schools closing for low performing schools. The Atlanta school district opposed investigations and whistle blowers but the scandal for widespread test fixing has finally been exposed. One teacher reported Saturday test-fixing parties where teachers and administrators would erase answers. Atlanta reportedly will fire all 178 involved who were found cheating and implement auditing and security procedures to solve the problem.
Finally, a Milwaukee mom took the step to turn in her 15 yr son and 13 yr daughter who she observed on videotape for a July 4th mob looting spree at BP gas station. In the Mom’s words “These are not the kind of kids that I’m raising to do stuff like this, and I feel like I put all my hard work and energy into my children, and for them to go out into the community and do things like that is just not acceptable”. Some callers to radio stations have blasted the mom as a snitch and advocated that she should have protected her children or given them another chance.
Every person has ethical decisions to make daily – small, large, and sometimes difficult. There is always a short-term benefit to lying and cheating. What will you choose to do and what will you report if you see wrongdoing?
What does success look like?
Despite the reality of unemployment, underemployment, the wars and battles overseas, should we look on the recent Internet IPOs, Zynga, LinkedIn, Pandora and Yandex , as a positive trend? My concern is déjà vu to 2000 before the bubble burst, IPOs may not be an indicator of much significance to the economy. For example, while Google and Facebook engage in corporate MMA, Pandora came out the gate strong and seems to be fading yet emerging but potential revenue stream issues are cropping up regarding publishers like EMI v. the performance rights societies.
So how do or should these businesses really measure success?
Comparing Facebook to LinkedIn to Pandora, who is the strongest and why? Check out nasdaq.com and Bloomberg.com.
Why and how has the financial industry measured success for these companies, for their valuation?
Speaking about IPOs and valuation, let’s discuss various entertainment delivery channels. Hulu was speculated to come out the gate at $2 Billion valuation.
What does that mean for Comcast or Dish or Verizon or AT&T?
If Hulu is riding over these ISPs and competing with them (Comcast-NBC had to relinquish some control re Hulu read Bloomberg) and Netflix, how does Hulu measures their success?
What potentially could threaten Hulu’s valuation and growth? Why?
There’s benefit in the discourse
“Benefit in the discourse” was a phrase that was a touchstone from my law school study group. Maurice, the originator of that phrase and many other phrases, loved to discuss at length. Maureen, Faith, and I often had our moments of grinding a subject flat. As a group, we discussed to learn, to help each other, to challenge ourselves on the issues and to improve our understanding. When I analyze, I tend to be brief, direct and don’t often require a lot of discourse. However, I remember Maurice’s phrase when I am in meetings or talking to others that need the comfort of further analysis and discourse.
I broach this topic as we begin to engage in the blog for our coursework. Let us refrain from impatience and condensation. Aha moments may arrive for us even when we think we have it all figured out. There is no one approach or best answer. Many of the topics we will discuss can be argued – What should be the business priority or what key drivers are affecting an industry or a business cycle?
The blog discussion is intended to be a skill building and practice area for sharing diverse perspectives and conflict resolution. All voices will need to be heard so let’s focus on listening. Let’s keep to one conversation. The goal is to focus on learning, not to win the argument but to seek the next level of understanding in order to expand the inquiry.
We often had heated conversations within our study group and we did not take it personally. Remember the old Warner Brothers cartoon with the coyote and the sheepdog? The coyote and the sheepdog would be in combat but then they would clock out and go off together. Similarly, engage intensely if necessary, be passionate about your thoughts and positions and recognize that it is just a conversation. Even in business, profits and processes are being discussed, very few of us are in the ER or first responders saving lives. Let’s keep the dialogue in perspective and grow our understanding.
WHY WE NEED UNIONS
Union sprang up in the 1880s as a result of significant labor issues and abuses. Child labor, excessive hours, low or no pay, unsafe work environment. As a result we have a 5 day – 40 hour work week, child labor heavily regulated, and minimum wages. Now unions have become targeted as the problem for our economic woes. Our memories are short and we forget the financial industry and how it has gutted our economy without a single financial executive facing any sort of civil or criminal consequence except for a large bonus.
We bail out the banks but vilify our teachers and unions. Do you think if we paid and incented teachers as we do our financial executives, our education system would be better? For those that believe in less regulation and the free market gurus will improve labor’s relationship with management, please see recent laissez-faire approach to financial institutions. Left to their own sense of regulation and what is right, companies and individuals tend to take advantage and abuse. There is no moral compass when it comes to business primarily because capitalism depends on a healthy dose of greed. Corporations claim to be socially responsible and donate to select charities but it is how a company treats its workers that is the real sign of its social responsibility.
Collective bargaining and pension plans are primary issues discussed within the union debate. Some would pare back collective bargaining to encompass only pay. However, remember if there is no regulation or redress on other issues, we are back to 1920 problems. We should not be naïve and believe that a company will do what is “right” if not required to do what is “right”. Corporate success is not measured by employee satisfaction but profits, cash flow and stock price. I query what is the answer to proponents who advocate removing social safety nets. How does Congress “promote the general welfare” when the message is every person for themselves? If we don’t tax ourselves, how do we pay for services? Some in Congress voted blindly and patriotically for emergency non-debated budgets for Iraq and Afghanistan. Now those same elected officials want to watch every penny and don’t want to extend unemployment benefits or increased and necessary benefits for veterans but fight vociferously for tax cuts for the rich.
The power and money are at the center of this debate. If Gov. Scott Walker can “win” this budget battle by achieving concessions from the unions, then he can begin to establish a platform for a bigger stage and discussion that he may be the Republican presidential candidate to take on Obama and solve the nation’s issues. Please note Walker was Bush’s budget adviser. The solution to the current economic woes is not to remove hard-fought rights from labor. Some argue that US manufactured products are too expensive and not competitive due to higher labor costs. If American workers want a bigger share of the manufacturing future, then to compete, unions must be busted or agree to roll back the clock on safety, health, and economic measures gained through union organizing since the 1920s.
Now the debate has broadened from Wisconsin to Ohio to Michigan. The next few years should be a good case study in civil disobedience and democracy. I just wonder whether the policy makers and politicians who propose to union-bust as the economic solution have considered who will consume the products and pay the bills and buy the houses when former union workers no longer earn a livable wage. “‘reducing the income of labor is not a remedy for business depression, it is a direct and contributory cause.’ More unemployment?….This revolution will be televised.
There’s a new CEO in town
How important is a CEO to a company’s success? How important is succession planning? A large part of leadership is to plan for success and succession. Sometimes a CEO or leader will announce a departure date into the future to allow for succession planning and transition. At other times, the board and business must react suddenly to an event and replace their CEO.
Although many companies experience a change in leadership at the CEO position, 2011 has been brutal on CEO turnover. No fewer than 11 companies have changed their leadership in the past 10 weeks: Campbell Soup, Pfizer, Google, AMD, Apple, DayStar, LeapFrog, Kenneth Cole, Oceaneering International, Allegheny Technologies. With the shift in the economy, some companies are seeking leadership that can get the business through tough times, for other businesses that may have survived the storm, a new leader is wanted.
With the rapidity and constancy of change at the top, why aren’t more companies doing succession planning? Succession planning like diversity sounds like a good idea, but for an idea to be “good” in business it has to show a positive impact to the bottom line. Oftentimes, with succession planning there is no reward or measurement on building “bench strength”. Most managers only get recognition if they can show they have a plan in place.
Many companies do engage in the planning process of succession planning, it is called many things in the corporate world e.g. Talent Management. Executives gather and rank employees seeking to identify who is “highly promotable” or “ready now”, and identify professional development or training to prepare individuals for the “ready now” status.
However, when the opening arrives whether at CEO level or below, do companies USE the plan and promote internally or hire from outside? If succession planning is to be successful and a process for development, coaching and professional development are key and must then translate. Success would be measured as a high percentage of internal hires.
How did recent CEO-shifting companies fare on the internal v. external metric? Most have internal successors. It should be noted that two have internal interim successor which begs the questions if the succession was anticipated and planned. For example, Kenneth Cole leadership falls back to its namesake after an external CEO moves on after 3 years.
Leaders that are identified as “high potential” often need coaching and cross-functional training and experiences in other areas of the business. It is helpful for a finance person to get some sales management experience. It is helpful for a marketing executive to obtain some operations experience. But at the end of the day, personalities do matter. If there are senior people who don’t support or sponsor your efforts, all the succession planning won’t help you if the CEO does not like you.
What is government’s role”
“We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America.”
So what’s the role of government? One of my favorite characters is Madame Defarge from a Tale of Two Cities. If you are not familiar with the character or the book from Charles Dickens (you know Dickens for his Ebenezer Scrooge from a Christmas Carol), here’s the short of it. Madame Defarge was a symbol of the French Revolution. While she sat quietly in her husband’s wine shop knitting, she was actually knitting the names of people that were targeted for death by the new republic, talk about cold-blooded.
And so as republicans and tea partiers and democrats debate what is the role of government, I examine the preamble to the Constitution and now we have an opportunity to examine Egypt, Bahrain, Wisconsin. Most are crying out that the Egyptian people have legitimate concerns and that it is time for a change. The Egyptian government has not addressed the concerns and now it is time for a new government.
The Founding Fathers were pretty apt in seeking a representative type of government having dealt with the issues from Mother England (“No taxation without representation”) and as much as we can have each person have a voice, it is a good thing so people can be heard.
I recently listened to Richard Wolff on KPFA speaking on his new book “Capitalism hit the fan”. Interesting commentary on how productivity for the average American worker has increased from 1970 to present due to technology but American workers’ wages have not increased over the same time period. Coincidentally, the CEOs have taken advantage of record profits over the years due to increased productivity from labor and awarded themselves huge salaries and bonuses. Meanwhile, the debate rages that teachers are overcompensated and unions should be busted as the problem before us.
So back to government.
• What services will government support – parks, healthcare, schools, hospitals, garbage, water?
• How will we pay for those services?
• What about human rights and social justice and the whole conundrum, at what cost?
If we can focus on the lofty aims of the preamble and figure out how to pay for it, the world can be a beautiful place.
Establish Justice (LAWS, COURTS) – so far prison developers have made incarceration a profit maker. But there are too few public defenders for the case load, add social workers to that mix also. We know that jail or prison does not rehabilitate and places a stigma on the convicted. Can we find a better way to address non-violent offenders? Jobs, job training anyone?
Insure domestic Tranquility (ORDER, STRUCTURE, RESOLVE DISPUTES) America promotes discourse and debate but our government is as entrenched as any other when civil disobedience rears its head – Ruby Ridge, Waco.
Provide for the common defense – (SAFETY) – Safety is broad reaching tentacles, our police services, those that protect the safety of our food, air, and water. Opposing sides fight for lower restrictions that threaten safety to the environment and health for profit.
Promote the General Welfare – (SERVICES) – Here’s the rub. If it promotes the GENERAL welfare let’s support it. Is that contra to a capitalistic society, given the opportunity to let the free market self-regulate for the betterment of the general welfare it does not. Promote the general welfare is not only general services that we have come to expect but also regulations.
Secure the Blessings of Liberty to ourselves and our posterity (HUMAN RIGHTS) Human rights is so intertwined with religion, sexism, racism that acceptability and a common standard is difficult and debatable. Nevertheless, just like bullying which has become front page news, each person should have the right to life, liberty and the pursuit of happiness. But that is where the debate begins with consideration of power and control, ethnic cleansing, cheap labor. If I can do it to you, I will.
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