Saturday, September 20, 2014

Lost in the Woods

I am the way, and the truth, and the life. - Jesus (John 14:6)

When I was around 12, my Dad moved our family from the suburbs of Minneapolis to a rural area of Northern Minnesota.  He’d started a new job there working in the iron mines.  I’ve always had a bit of wanderlust in me, so I began exploring the woods surrounding our home.  Before long, I’d become a pretty decent woodsman able to successfully navigate my way through the dense underbrush of Minnesota’s jungle-like forests.  I didn’t think much of it at the time, but those skills are actually not easy to learn.  In fact, the U.S. Army teaches these basic skills to their soldiers and officers.

I moved away from home when I was 20 and have lived in cities ever since.  When I was in my early 40s, I’d gone home to visit my folks and my little sister happen to have her four-wheeler there.  Impulsively, I jumped on her four-wheeler and took off into the woods following a trail.  I mistakenly got off the main trail and found myself in a dense area of underbrush.  I tried to put the four-wheeler in reverse in order to get back on the main trail but it wouldn’t go into gear.  (I didn’t know it at the time, but the reverse mechanism on her four-wheeler was broken.)  I kept going deeper into the forest hoping to find a place to turn around but couldn't.  I eventually got stuck and couldn’t move any further and finally admitted to myself that I was lost!

I started to panic a bit, but then pulled out my cell phone and used satellite navigation to find my way back home on foot.  (As an aside, I actually stumbled upon a newly born deer fawn; I was really in the boonies now.)  When I got home, I called my nephew Micah to come and save me.  He’s a much better woodsman than I ever was, and he was able to save the day.

Learning to navigate our way through the dense underbrush of the forests of life is not easy either.  When we’re young, our parents try to teach us right from wrong, how to live, and how to find our own way.  They may bring us to church, teach us to have faith in God, and guide us along the way.  But as we grow older and get out on our own, we oftentimes forget the basics of navigating through life and may lose our way.  When that happens, call on God to save you and show you the the way home.  God is just a prayer away.

Monday, September 15, 2014

Robert Reich Calls Out Harvard Business School for Its Role in Widening Inequality The top educator of American CEOs needs to rethink what it is teaching.

Robert Reich Calls Out Harvard Business School for Its Role in Widening Inequality

The top educator of American CEOs needs to rethink what it is teaching.

The following essay originally appeared on Harvard Business Review’s blog and can be found by following this link:

September 15, 2014   No institution is more responsible for educating the CEOs of American corporations than Harvard Business School – inculcating in them a set of ideas and principles that have resulted in a pay gap between CEOs and ordinary workers that’s gone from 20-to-1 fifty years ago to almost 300-to-1 today.
survey, released on September 6, of 1,947 Harvard Business School alumni showed them far more hopeful about the future competitiveness of American firms than about the future of American workers.
As the authors of the survey conclude, such a divergence is unsustainable. Without a large and growing middle class, Americans won’t have the purchasing power to keep U.S. corporations profitable, and global demand won’t fill the gap. Moreover, the widening gap eventually will lead to political and social instability. As the authors put it, “any leader with a long view understands that business has a profound stake in the prosperity of the average American.”
Unfortunately, the authors neglected to include a discussion about how Harvard Business School should change what it teaches future CEOs with regard to this “profound stake.” HBS has made some changes over the years in response to  earlier crises, but has not gone nearly far enough with courses that critically examine the goals of the modern corporation and the role that top executives play in achieving them.
A half-century ago, CEOs typically managed companies for the benefit of all their stakeholders – not just shareholders, but also their employees, communities, and the nation as a whole.
“The job of management,” proclaimed Frank Abrams, chairman of Standard Oil of New Jersey, in a 1951 address, “is to maintain an equitable and working balance among the claims of the various directly affected interest groups … stockholders, employees, customers, and the public at large. Business managers are gaining professional status partly because they see in their work the basic responsibilities [to the public] that other professional men have long recognized as theirs.” 
This view was  a common view among chief executives of the time. Fortune magazine urged CEOs to become “industrial statesmen.” And to a large extent, that’s what they became. 
For thirty years after World War II, as American corporations prospered, so did the American middle class. Wages rose and benefits increased. American companies and American citizens achieved a virtuous cycle of higher profits accompanied by more and better jobs.
But starting in the late 1970s, a  new vision of the corporation and the role of CEOs emerged – prodded by corporate “raiders,” hostile takeovers, junk bonds, and leveraged buyouts. Shareholders began to predominate over other stakeholders. And CEOs began to view their primary role as driving up share prices. To do this, they had to cut costs – especially payrolls, which constituted their largest expense.
Corporate statesmen were replaced by something more like corporate butchers, with their nearly exclusive focus being to “cut out the fat” and “cut to the bone.”
In consequence, the compensation packages of CEOs and other top executives soared, as did share prices. But ordinary workers lost jobs and wages, and many communities were abandoned. Almost all the gains from growth went to the top.
The results were touted as being “efficient,” because resources were theoretically shifted to “higher and better uses,” to use the dry language of economics.
But the human costs of this transformation have been substantial, and the efficiency benefits have not been widely shared. Most workers today are no better off than they were thirty years ago, adjusted for inflation. Most are less economically secure.
So it would seem worthwhile for the faculty and students of Harvard Business School, as well as those at every other major business school in America, to assess this transformation, and ask whether maximizing shareholder value – a convenient goal now that so many CEOs are paid with stock options – continues to be the proper goal for the modern corporation.
Can an enterprise be truly successful in a society becoming ever more divided between a few highly successful people at the top and a far larger number who are not thriving?
For years, some of the nation’s most talented young people have flocked to Harvard Business School and other elite graduate schools of business in order to take up positions at the top rungs of American corporations, or on Wall Street, or management consulting.
Their educations represent a substantial social investment; and their intellectual and creative capacities, a precious national and global resource.
But given that so few in our society – or even in other advanced nations – have shared in the benefits of what our largest corporations and Wall Street entities have achieved, it must be asked whether the social return on such an investment has been worth it, and whether these graduates are making the most of their capacities in terms of their potential for improving human well-being.
These questions also merit careful examination at Harvard and other elite universities. If the answer is not a resounding yes, perhaps we should ask whether these investments and talents should be directed toward “higher and better” uses.
Robert B. Reich has served in three national administrations, most recently as secretary of labor under President Bill Clinton. He also served on President Obama's transition advisory board. His latest book is "Aftershock: The Next Economy and America's Future." His homepage is

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