Financial life in a big town

Anyone who has tried to break a bad habit knows how hard it can be. Every New Year’s Day millions resolve to lose weight, quit smoking or get better organized. And every Jan. 2, those making the resolutions are resolved to try it again another day.

In his latest book, "Strategy and the Fat Smoker," author David Maister equates business achievement with the struggle a smoker has when trying to quit the habit. Many try, but not all will succeed.

With business, as it is with smoking, Maister surmises some essential questions of strategy are not being asked and answered despite a plethora of practical wisdom that is well disseminated, publicized and understood.

Smokers who want to quit know that doing so will benefit their health and their wallets. Executives know a well-designed business approach will add to their bottom line.
There are a million good reasons for doing both. But turning reason into reality means thinking differently about strategy. Without answering some tough questions, the smoker lights up again or the business fails because of the pursuit of the same old failed strategy in hopes of a better result.

Those who lead organizations, according to Maister, must think differently about strategy. First, they must learn what drives and motivates people, then take that information to the next level by using it to figure out how to change and improve their businesses. Second, they must be ready to rebound from mistakes. The ability to recover from mistakes is a strategy move in its own right.

Maister’s book has opened my eyes to two important ways of looking at strategy.

First, it has helped me realize that creating a single resolve in a group to take action is more important than merely creating insights into what should be done. Getting everyone on board and, as Maister says, "sticking to the diet" can be a leader’s biggest challenge. If done well, however, it can also be the most rewarding.

Second, is the importance of taking an action-oriented approach to strategy cash advance loan. Problems should be addressed now, before something serious happens in the future, leaving what needs to be fixed beyond repair. Being successful means moving forward and implementing something management and your organization cannot ignore.

Maister also reveals his finding that success cannot be achieved if you rely on only doing things "well most of the time." For him, the pursuit of short-term goals is inherently anti-strategic and self-defeating. The time necessary to make noteworthy advancements cannot be undervalued.

He reminds us that anything worth putting an effort into, whether it is breaking a bad habit or building a better business strategy, will take time to bear fruit. You must forgo some of today to reach a better tomorrow.

Maister says strategies in business are applied more efficiently when presented as matters of principle and not just convenience. In establishing those strategies, business leaders must take into account that some people have an appetite for high-investment, future-oriented strategies they are willing to defer. Others, they will find, are reluctant to invest, even in their own future.

If you are willing to invest some of your time on a strategy book designed to make you a better manager, take a bite out of "Strategy and the Fat Smoker."

BENJAMIN OLA. AKANDE IS DEAN OF WEBSTER UNIVERSITY’S SCHOOL OF BUSINESS AND TECHNOLOGY. READERS ARE INVITED TO JOIN WEBSTER’S ONLINE BIZTALK BOOK CLUB. GO TO WWW.WEBSTER.EDU/SBT/BOOKCLUB TO JOIN AND PARTICIPATE IN THE BOOK CLUB CHAT FOR "STRATEGY AND THE FAT SMOKER" FROM NOON TO 1 P.M. TODAY. NEXT MONTH’S BIZTALK BOOK CLUB SELECTION IS "LIFE’S A CAMPAIGN: WHAT POLITICS HAS TAUGHT ME ABOUT FRIENDSHIP, RIVALRY, REPUTATION, AND SUCCESS," BY CHRIS MATTHEW.

‘Strategy and the Fat Smoker’ by David Maister The Spangle Press, $29.99

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Stock index futures fell on Thursday as investors fretted about the outlook for corporate profits and news that Lehman Brothers (LEH.N: Quote, Profile, Research) put $1 billion of soured assets onto its balance sheet.

Retailers were also a focus as they released March sales reports. Wal-Mart Stores Inc (WMT.N: Quote, Profile, Research) posted same-store sales that fell short of Wall Street’s forecasts but raised its profit forecast. Shares of Wal-Mart, a Dow component, rose 2 percent to $55.24.

But a headwind for stocks was the price of oil, which traded above $111 a barrel and near a record high set on Wednesday.

Shares of Lehman Brothers were down more than 5 percent in Europe after the Wall Street bank said in a regulatory filing it liquidated three floundering investment funds and put $1 billion of assets onto its balance sheet.

Home goods retailer Bed Bath & Beyond Inc (BBBY.O: Quote, Profile, Research) joined United Parcel Service Inc (UPS.N: Quote, Profile, Research) and others when it gave a quarterly profit forecast well below Wall Street’s estimates quick payday loan. Its shares dropped 5 percent after the bell from a Nasdaq close of $29.47.

“We have entered a very cautious phase with investors very much on edge about earnings,” said Peter Cardillo, chief market economist at Avalon Partners.

“We also have oil prices making new highs and the dollar making new lows against the euro. While the averages are not falling apart, we’ve certainly embarked in a cautious, downward trading range.”

S&P 500 futures fell 6.4 points, but were above fair value, a formula to evaluate pricing taking into account interest rates, dividends and time to expiration on the contract. 

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Internet icon Yahoo, under pressure of a three-week deadline from Microsoft to accept its $41 billion buyout bid, said Monday that it doesn’t oppose a deal with the huge software maker but wants a better offer.

Microsoft made its offer for Yahoo in late January. The deal would create a stronger rival to Google Inc credit report. At the time, the cash-and-stock bid was valued at $44.6 billion, or 62 percent above Yahoo’s market value. As of Friday, the deal was worth just under $41 billion.

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Pernod Ricard SA (PERP.PA: Quote, Profile, Research), the soon-to-be owner of Absolut vodka, faces challenges for the prestige brand as upstarts keep edging for a slice of the largest, booming sector of the liquor market.

Pernod USA Chief Executive Alain Barbet said last week in New York it was too early to give specific plans for the brand, since the costly $8.9 billion (5.63 billion euro) acquisition has yet to be made final.

But Barbet told Reuters in an e-mail exchange that the French company plans to apply its experience in launching higher-end versions of its drinks, such as Chivas Regal 25 Year Old scotch and Jameson Rarest Vintage Reserve whiskey.

U.S. competition is fierce: at least 59 new kinds of vodka hit shelves last year after at least 60 the year before.

Pernod needs to keep Absolut fresh, especially for younger drinkers who may have missed its iconic ad campaign that began in 1980 featuring a haloed bottle and the words “Absolut Perfection.”

“Absolut has been holding its own for a long time now,” said Eric Schmidt, research director for Beverage Information Group, a market research firm specializing in the alcoholic drinks industry free credit report online. He forecast continued growth for Absolut, helped by a new ad campaign.

Sales of vodka, the biggest spirits segment, rose 6.7 percent to 52.7 million cases last year, while whiskey only grew 0.2 percent to 45 million cases, Schmidt said.

“They didn’t pay an outrageous price for this,” Schmidt said of Pernod’s bid, which was 27 percent higher than the high end of analysts’ estimates and beat out three other suitors. 

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SEOUL–Special prosecutors probing claims of corruption at Samsung Group took their investigation to the very top yesterday, questioning its chair for nearly 11 hours over allegations the iconic conglomerate used a slush fund to bribe influential legal figures.

Lee Kun-hee, who has run South Korea’s biggest industrial group for two decades, appeared for questioning at the office of the independent counsel examining the claims.

Surrounded by a throng of reporters, the 66-year-old Lee, moving slowly and speaking softly, stopped briefly to answer questions, saying he had nothing to do with directing the alleged fund.

The independent counsel, established by parliament and approved by South Korea’s previous president, is focused on allegations raised by Samsung’s former top lawyer.

Kim Yong-chul claimed in November that Samsung had $200 million (U.S.) in the slush fund and used it regularly to bribe prosecutors and judges. He also said that Lee’s wife used some of the money to purchase expensive works of art from abroad.

Samsung vociferously denied the allegations when they were raised.

Lee, whose father established the conglomerate 70 years ago, is widely credited with turning its flagship Samsung Electronics Co. into a top global brand during his tenure by transforming the corporate culture into one focused on quality.

Samsung Group – with interests ranging from shipbuilding to leisure – is widely respected by South Koreans as the global face of their economy payday loans. Samsung, however, is controversial, with many South Koreans also feeling the family-run conglomerate has too much power and influence in society.

"I’ve come here to raise the voice of the people’s desire, that the criminal behaviour of Lee Kun-hee should thoroughly be revealed, investigated, and he should be punished," Chung Jong-kwon, a protester, said outside the special counsel’s office before Lee arrived.

Lee himself took aim at such opinions, telling reporters they were to blame for propagating negative portrayals of Samsung.

"I have never thought of (Samsung) as a criminal organization," Lee said when questioned. "I think the problem is with you reporting that."

Prosecutors, who began the investigation in January, questioned Lee’s wife, who heads a Samsung art museum, for more than six hours Wednesday. His son and brother-in-law and senior Samsung officials have also endured hours of questioning.

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WASHINGTON — The Labor Department reported Thursday that new applications filed for unemployment insurance jumped by a seasonally adjusted 38,000 to 407,000 for the week ending March 29.

The increase left claims at their highest point since Sept. 17, 2005, after the blows of the devastating Gulf Coast hurricanes.

The latest snapshot of labor activity was worse than economists had anticipated. They had predicted claims would be much lower, around 365,000.

In other economic news, the Institute for Supply Management said the nation’s service sector — including retailers, hotels, insurance companies and other firms — contracted in March but not as much as the month before faxless payday advance. The institute’s index registered 49.6 last month, compared to 49.3 in February. A reading below 50 indicates contraction, while a reading above 50 indicates growth.

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Monsanto Co., the world’s largest seed producer, said fiscal second-quarter profit more than doubled as U.S. farmers bought more Roundup weed killer and genetically modified corn seed.

The Creve Coeur-based company is taking market share from rivals such as DuPont Co. by spending more to develop new varieties of corn, soybean and cotton seeds. Higher prices will help double gross profit from Roundup this year, Chief Executive Hugh Grant said on a conference call.

Net income in the three months through February rose to $1.13 billion, or $2.02 a share, from $543 million, or 98 cents, a year earlier. That surpassed Thomson Financial’s prediction of $1.72 a share.

The second-quarter earnings include a 23-cent gain from the settlement of Monsanto’s claims related to Solutia Inc.’s emergence from bankruptcy.

Sales were boosted by global demand for Roundup and genetically modified corn seeds in the U.S bad credit payday loan. and Brazil, Monsanto said.

"Between now and 2012, I think we’re the only company in agriculture that can point to consistent growth irrespective of swings in commodity prices, fluctuations in planted acres or the usual ups and downs in the popularity of things like ethanol," Grant said.

Monsanto said it won an additional 3 to 5 percentage points of the U.S. corn-seed market this year, confirming earlier forecasts.

Monsanto last year surpassed DuPont’s Pioneer unit as the largest producer, with 32 percent of U.S. corn-seed sales. DuPont had 30 percent and has pledged to hold its share steady this year. Monsanto said its share this year will be 35 percent to 37 percent.

The Associated Press contributed to this report.

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NEW YORK — Shares of Merck & Co. and Schering-Plough Corp. fell to record lows Monday, as analysts warned new clinical data would cause sales of their blockbuster cholesterol drug Vytorin to fall further.

The companies market Vytorin through a joint venture, but earlier this year, partial results from a clinical study showed that it was no more effective at limiting plaque buildup than Merck’s Zocor, a drug that is already available in generic form. Full results of that study were released Sunday.

Vytorin is a combination of Zocor and Schering-Plough’s drug Zetia.

Schering-Plough shares plunged as low as $14, touching their lowest levels since August 1996. Merck shares fell as low as $36.82, their lowest since June 2006.
Leading physicians are now recommending the use of older drugs called statins before putting patients on Vytorin. Many physicians had prescribed Vytorin in lieu of higher doses of statins because of what some said was an undue fear of side effects.

"There was an irrationality to begin with," said Dr. John LaRosa, president of State University of New York Downstate Medical Center.

One ultimate result of the outcome could be a tightening of regulatory standards at the FDA when it comes to approving cholesterol drugs, LaRosa said.

Federal and New York state officials have been investigating why results of the study were not released for nearly two years after the study ended.

On Monday, a congressional committee investigating the issue released some damning evidence same day payday loans.

The Senate Finance Committee said even the researcher who led a crucial study of the drug angrily accused Vytorin makers Merck & Co. and partner Schering-Plough Corp. of withholding negative results to boost sales.

A letter from the committee’s ranking Republican, Sen. Chuck Grassley of Iowa, states that delaying results of the study affected medical decisions and put financial burdens on patients and the federal government, which has paid hundreds of millions of dollars for Vytorin.

Wall Street expects prescriptions of Vytorin to decline further in the wake of a recommendation to use the drug only after initial therapy with older drugs like Pfizer Inc.’s Lipitor and AstraZeneca PLC’s Crestor.

Lehman Brothers analyst Charles Butler downgraded Schering-Plough shares on the news, and cut his price target on the stock by more than 40 percent.

He said prescriptions of Vytorin will keep falling, and because Schering-Plough relies heavily on the joint venture, he slashed his profit estimates over the next five years.

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