As companies try to buttress their balance sheet, we are witnessing a healthy, but troublesome after effect: Too much cash on company balance sheets.  Excluding utilities and financial institutions, members of the Standard & Poor’s 500 Index ended mid last year with a record $648bn in cash and short-term securities.

Companies are hoarding cash, even the non-financial ones, having gotten their handslapped by the credit markets but not (yet) facing redistribution pressure from shareholders in the form of dividends or buybacks. 

I'm not in favor of government intervention in the markets, but instead of bank taxes and rhetoric against bonuses, why not give companies an incentive to get this cash off their balance sheets?  Tax the cash!  Give companies incentives to create jobs with this cash and push them back into the hiring mentality.&nb Read More »

Most management academics will adamantly defend outsourcing - a company that can source activities elsewhere for cheaper/better should do so.  Hence the rash of manufacturing, engineering, IT activities that have been sourced to cheaper labor pools overseas.  This is great for the consumer & the company, but terrible for the middle class worker.

Consider this: an Executive recently told me that his manufacturing facility in the US at non-union rates is $15/hr, facility in Tijuana, MX is $4.50/hr, and facility in China is $1.50/hr.  He will shift more and more of his work to the China location.

But where does this leave the community?  Those jobs will not be replaced and there are no other jobs to be retrained too -- there is simply nothing for these people to do.  There is a whole class of worker that thrived in the 80's that is becoming irrelevant now; it seems like we are on an inevitable march to Read More »

There are several opinions out there on whether the Olympics are good/bad for the resident city.  Whether you agree with the Games or not, it is important to see who emerges as winners.

• IT - the Games take an enormous component (6,500+ PCs, 4000+ Printers in Chicago's bid book).  In Sydney, 1.3M lines of software code were needed
• Construction - $1B in venue construction in chicago's bid book
• Raw Materials - 130 tonnes of steel in Sydney
• Tourism - $7B incremental spend in tourism projected by Chicago
• Employment - 315,000 man years of labor w/$11B in spend - Chicago 2016 study

All in, Chicago is projecting $22.5B in incremental benefit including.  All these arguments are subject to debate - what is undeniable is that a HUGE AMOUNT OF SPEND will be occur Read More »

Jack Welch recently announced that he would be launching an online MBA (http://www.businessweek.com/bschools/content/jun2009/bs20090622_962094.htm).  He claims he will be heavily involved in curriculum development, even teaching, the managerial principles that made him one of the most revered executives of all time.

Yawn.  For Jack Welch's online MBA to be truly novel, he will need to lean on his sizable corporate rolodex from a post graduate employment perspective.  That is, he must convince corporate recruiters that a product of his online university, would be equally (or better) adept at solving problems than traditional schools.  If Welch makes a few calls to GE and ex-GE execs ( Home Depot, Best Buy, etc), he could influence hiring from his online MBA graduates and this could become a revolutionary education format, one that would threaten traditional schools.  If not, it will disappear into the muck of already crowded Read More »

If looking to switch careers, look no further than turnaround & restructuring firms -- the practice is in torrid growth now with practically all companies suffering from recession doldrums and turning to structural actions.  Consultancy Alix partners reportedly has 60+ staffers helping GM with their bankruptcy; Deloitte was under pressure from the Treasury department to fast track the Chrysler deal.

Advisory firms in this restructuring space (there are plenty) are getting their moment in the sun.  If you are looking to jump to a growing space, emphasize the cost cutting or value realization points in your resume, and apply to these firms to ride the wave.

Aveek Guha, MBA Day Camp
Now on the iphone! -- http://itunes.com/apps/mba101 Read More »

There will likely be a near term deglobalization that will occur due to this financial meltdown. Take JA Solar out of China: last summer, they bought $100M in bonds at the urging of their Lehman bankers. Now, they have written off the entire $100M, and its stock is down 66% since Lehman filed for bankruptcy.  The consequence: they will now keep their financial investments and assets at home -- "For the near future, we are quite comfortable with Chinese banks, they are backed by the Chinese government", says their CFO, Anthea Chung. [business week, may 18th]

This trend of capital flight back to originating countries will only increase in the near term with firms still staggerring from their US losses.  Couple this with the tight US consumer market and foreign geographies look even more pragmatic for investment in funds and talent.

Look to see

It is cool to be a technologist again.  Web 2.0 & New Media is becoming a wide ranging, not well understood, but highly coveted turf for management consultancies, marketing departments, ad agencies, web firms, and a range of mom-and-pop specialists.  The jury is still out on who will reign supreme.  My view on the winners?  The people that actually understand the technologies.

Poor Gordon Gecko - End of an Era

As the economic recession is proving to be deeper & broader than anyone expected, there will be one set of clear winners -- beneficiaries of the almost one trillion dollar stimulus package.  With even healthy companies belt tightening (see Google, Microsoft, Digg recent job cuts), the stimulus package will now have near exclusive ownership of this elusive category: where are jobs & stock investments safe?

So everyone should look at the spend in this package -- one industry winner that is emerging is broadband, with a near $3B bet in this space.  We may not like the government messing with free markets, but there is no reason why we can't benefit from it -- pay close attention to the winners in the package because they look like the clear heavyweights to back.

Aveek Guha
President, MBA Day Camp
www.mbadaycamp.com
http://mbadaycamp.typepad.com/mbablog/

This year, there is less patience for development of talent.  Companies are looking for individuals that are professionally-ready, so be in that category.  Ask tough questions on how the firm is managing through the recession, what are their competitors doing that keeps them up at night, etc -- don't grovel for points, its easy to see a mile away.

If you have experience in recessionary topics in your background, now is the time to bring them to the forefront.  That means cost-cutting (as unsexy as it may be) or innovation.  On the former, experience in process redesign, shared services, etc will be of interest to recruiters -- its germane to the current times.  On the latter, many companies, while hunkering down now, are still trying to see around the corner.  So experience in innovation (however, broadly you want to define it) will be interesting -- so what have been involved in that pushes the fron Read More »