SAN FRANCISCO (April 14, 2009) – Here are three great business lessons I gleaned from this Sunday’s New York Times.
First, Terry J. Lundgren, Chief Executive Officer of Macy’s told Times business writer Adam Bryant that early in his career – as a management trainee at Bullock’s department store – he was assigned to a buyer who delegated jobs that Mr. Lundgren believed were stupid, menial tasks. In visiting with the corporate recruiter who brought him to Bullock’s following his graduation from college, Mr. Lundgren outlined his frustration and asked to be transferred to another department where he could do more. “The corporate recruiter just nodded and then pointed over his shoulder to a poster. It had a little tree in a pot., and it said, ‘Bloom where you are planted’.”
I wonder how many administrative residents and fellows who are now beginning their healthcare careers this summer will need to be reminded of this lesson at some point over the next year?
Second, John C. Bogle, a stellar money manager and founder of the Vanguard Group and one of the few moral authorities left standing on Wall Street following the recent carnage, argues that America is anything but an ownership society. Instead, he believes that America has deteriorated into an agent society – we have turned over our savings to mutual fund agents who are afflicted with a conflict of interest.
Speaking to Gretchen Morgensen, the outstanding columnist for the New York Times business section, Mr. Bogle questioned “how so many highly skilled, highly paid securities analysts and researchers [could fail] to question the toxic filled balance sheets of Citigroup and other leading banks and investment banks?”
Ms. Morgensen, a champion of shareholder and investor rights, points out that these failures occurred in spite of the Investment Company Act of 1940, which states that “mutual funds should be managed and operated in the best interests of their shareholders rather than the interests of their advisers.”
Mr. Bogle suggested that one should not ignore the fact that many of these fund managers operated with multiple conflicts of interests – their fees for mutual funds were significantly higher than those they charged to pension funds and that many of these fund managers worked for public companies whose stockholders were pushing for (read: demanding) higher returns.
Mr. Bogel believes that we should force our agents to relearn what a fiduciary means. We need to become a fiduciary society, Mr. Bogle argues.
“A fiduciary, these managers seem to have forgotten, acts for the sole benefit and interest of another,” Ms. Morgensen writes.
However, alas, Ben Stein, a conservative writer and television personality who pens a periodic column for the Times’ business section, seems to be focused on the real reason for all this turmoil and unprecedented loss of wealth. His is the third lesson from the Sunday Times.
“I know people and I know money, at least the basics. Wall Street knows how to get its hooks into government. This is how the world works. Money talks.”
Now a fourth lesson. Consider it value-added wisdom. To paraphrase several authorities – from Ayn Rand to the Bible: Money is the root of all evil, but man needs his roots.
John G. Self is Chairman and Senior Client Advisor of JohnMarch Partners. He is a Co-Founder of the Firm. A former investigative reporter and crime writer with more than 30-years of leadership experience in public relations, national marketing and business development and as Chief Executive Officer of hospitals, and consulting firms, Mr. Self is highly regarded for his keen insight into business culture and the types of leaders who will succeed. You can contact Mr. Self at 214.220.1234 or JGSelf@johnmarch.com. Or you can follow him on Twitter at Self_JohnMarch.