Freek Vermeulen´s blog Random Rantings
In a crisis, innovate, 9 January 2009
...So, when you’re down: innovate. Don’t just wait for the inevitable to
happen; prolonging your decline out of some false hope that you’ll
weather the storm. Storms kill; get out of it while you can.
CEOs and their stock options… (oh please…), 23 December 2008
...No I am not so sure. Also because two strategy professors actually measured this stuff: Gerry Sanders from Rice University and Don Hambrick from
the Penn State University. They examined 950 American CEOs, their stock
options and their risk taking behavior. They found that CEOs with many
stock options made much bigger bets; for instance, they would do more
and larger acquisitions, bigger capital investments and higher R&D
expenditures. That is, where CEOs with few stock options would prefer
to invest $50m in a particular project, they would plunge in a $100m.
In a downturn, manage your revenues, not your costs 18 December, 2008
...So why does spreading one’s revenue base in meagre times make more sense? It is, among others, because no job will be big enough to sustain the whole firm. What keeps firms afloat is accessing a variety of smaller pockets of revenues. Hence, rather than focus on job 1, hoping it will be enough to sustain the firm, the company’s effort should be aimed at identifying and creating additional sources of revenue
What really caused the 2008 banking crisis?, 16 November 2008
When you compare the 2008 banking crisis with the Enron debacle, with Ahold’s demise or even with the Union Carbide disaster in Bhopal in 1984 some surprisingly clear parallels emerge. Various explanations have been offered for each of these crises, ranging from top management greed, failing watchdogs to insufficient government regulation and inappropriate accounting and governance structures. Yet, there is one common cause underlying all these symptoms and triggers, and that is the structural failure of management.
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